How to use Poisson distribution in Excel
The Poisson distribution is a discrete probability distribution that describes the probability of a certain number of events occurring in a fixed interval of time or space. It is often used to model the number of events that occur in a given time period, such as the number of phone calls received by a call center in an hour.
POISSON.DIST function
Excel has a built-in function called POISSON.DIST that can be used to calculate the probability of a certain number of events occurring in a Poisson distribution. The syntax for the POISSON.DIST function is:
=POISSON.DIST(x,mean,cumulative)
where x is the number of events, mean is the average number of events, and cumulative is a Boolean value that specifies whether to return the cumulative probability or the probability mass function.
For example, the following formula would calculate the probability of 3 events occurring in a Poisson distribution with a mean of 5:
=POISSON.DIST(3,5,TRUE)
The output of the POISSON.DIST function is a number between 0 and 1. This number represents the probability of the event occurring.
Real-life example
For example, the Poisson distribution can be used to model the number of cars that pass through a toll booth in an hour, the number of phone calls received by a call center in a day, or the number of defects found on a product in a factory.
Enter the mean of the Poisson distribution in a cell.
Enter the number of events in a cell.
In a blank cell, enter the following formula:
=POISSON.DIST(x,mean,TRUE)
where x is the cell that contains the number of events and mean is the cell that contains the mean of the Poisson distribution.
Excel will calculate the probability of the event occurring and display the result in the cell.
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