A quick guide:
How to use the POISSON.DIST Function in Google Sheets:
1) Enter =POISSON.DIST in an empty cell
2) Fill in the ‘x’ parameter, mean and Cumulative value.
3) The function should appear like this:
=POISSON.DIST(A2, 7, TRUE)
There may be instances when one wishes to calculate the likelihood of occurrence of an event (specified number of times) over a while. In such scenarios, the POISSON.DIST function in Google Sheets can come in handy.
- A call center receives 100 calls per hour on average. What is the likelihood of receiving 150 calls in an hour?
- A restaurant receives 500 orders a day on average. What is the likelihood that it gets 100 orders a day?
- It rains 15cm on average during the rainy season. What is the likelihood that it rains 25cm in a day?
All of the questions above have one thing in common. They are focused on calculating the likelihood of any unforeseen events. The POISSON.DIST function in Google Sheets allows you to easily calculate the likelihood of unforeseen events.
POISSON distribution function comes into play when one is well aware of how frequently an event occurs on average (mean) and to calculate the probability of its occurrence if it were to occur ‘x’ times.
Let’s decode the anatomy of the POISSON distribution function and learn how to implement it for different possible scenarios.
POISSON.DIST function in Google Sheets | Syntax and explanation
The POISSON.DIST function in Google Sheets is used to calculate the probability. Therefore, the range of output is from 0 to 1.
=POISSON.DIST(x, mean, cumulative)
The POISSON.DIST function in Google Sheets requires three arguments: x, mean, and cumulative. Let’s understand what their significance is:
- x: To find the likelihood of an event to occur ‘x’ number of times
- Mean: How frequently an event occurs on average for a given period
- Cumulative: It’s used if we wish to calculate the likelihood of an event to occur ‘x’ or fewer times. If we wish to calculate only for cases where an event was to occur exactly ‘x’ times then we don’t use cumulative in that case.
Understanding the POISSON.DIST function in Google Sheets
The POISSON distribution function helps us calculate two types of probabilities. They are as follows:
- One is to calculate the likelihood of occurrence of an event an exact ‘x’ number of times.
- Another one is to calculate the likelihood of occurrence of an event ‘x’ or fewer times.
Let’s look at an example of POISSON.DIST function in Google Sheets.
In the example given below, we have a spreadsheet consisting of the amount of rainfall (cm) per day that is well represented by Column A. Column B and column C represent the output of POISSON.DIST function for non-cumulative and cumulative parameters.
Column B deals with finding the probability of receiving exactly ‘x’ cm of rainfall in a day. That’s why it’s called non-cumulative.
=POISSON.DIST(A2, 7, FALSE) #FALSE value for non-cumulative probability
Column C deals with finding the probability of receiving ‘x’ or less cm of rainfall in a day. That’s why it’s called cumulative.
=POISSON.DIST(A2, 7, TRUE) #TRUE value for cumulative probability
How to implement POISSON.DIST function in Google Sheets
In this tutorial, we will start with the step-by-step implementation of POISSON.DIST function in Google Sheets.
You can make a copy of the spreadsheet used in this tutorial with all the examples. Get it here.
The steps are as follows:
- Select the cell where you want to hold the result of POISSON.DIST function
- Begin your function with the ‘=’ sign. Type ‘POISSON.DIST’. The google sheets will prompt this function, press enter key to autocomplete. The tooltip guide will appear along with the details.
- Fill in the value of the ‘x’ argument. In this case, A2 is our ‘x’ argument.
- Fill in the value of the mean for the next argument. In this case, we are taking the mean as 7 (It means average rainfall is 7cm).
- In column B, we are calculating only for exact values of ‘x’. Therefore, we will fill the next argument as false.
- Hit the Enter key and drag down the formula to fill the rest of the column.
- All the parameters will be the same for Column C except the Cumulative parameter. In this case, it will be True.
- Similarly, drag the formula to fill column C with their respective values. You will end up with the following table.
We have learned how to use the POISSON.DIST function in Google Sheets using illustrative example. POISSON.DIST function is widely being used in multiple domains where one needs to be prepared for unforeseen events. Now you are all set to start using this powerful statistical tool to your advantage.
The inbuilt POISSON.DIST function in Google Sheets makes calculating probabilities a cakewalk.
Frequently asked questions
What is the difference between binomial and Poisson distribution?
Binomial distribution describes the distribution of binary data from a finite sample. Thus it gives the probability of getting r events out of n trials. Poisson distribution describes the distribution of binary data from an infinite sample. Thus it gives the probability of getting r events in a population.
How do I know if my data is Poisson distributed?
A variable follows a Poisson distribution when the following conditions are true: Data are counts of events. All events are independent. The average rate of occurrence does not change during the period of interest.
What are the limitations of Poisson distribution?
The Poisson distribution is a limiting case of the binomial distribution that arises when the number of trials n increases indefinitely whilst the product μ = np, which is the expected value of the number of successes from the trials, remains constant.
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