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In my last blog post I showed the analyst how to create a binomial distribution in Excel, which can be read here:- https://medium.com/@tracyrenee61/how-to-create-a-binomial-distribution-in-excel-04dcea2bb54b
In this blog post I intend to reveal how to create a Poisson distribution in Excel.
The Poisson distribution was first introduced by French mathematician Simeon Denis Poisson. This distribution was published together with his probability theory in 1837. The work theorised about the number of wrongful convictions in a given country by focusing on certain random variables N that count, among other things, the discrete occurrences that take place during a time interval of a given length.
The Poisson distribution is a discrete probability distribution that tells how many times an event is likely to occur over a specific period. It is a count distribution, the parameter of which is lambda (λ); being the mean number of events in the specific interval.
As the Poisson distribution is a discrete function, the variable can only take specific values in a potentially finite list. For the Poisson distribution, the variable can only take whole numbers with no fractions or decimals.
The probability mass function (PMF) of the Poisson distribution function is:-
