Bernoulli asks, “how long have we been here?” Poisson replies, “I have no idea.”

Bad joke aside, memoryless behavior is a key component of a toy model of car rentals I made a while ago. I recently noticed that I was a bit lazy in my choice of RANDOM functions, so I’ve produced an update.

The difference is in the use of Poisson and Binomial distribution functions. In the original, I used the Poisson distribution everywhere to represent arrival processes. That’s reasonable in the limit, where a large number of candidate arrivals are realized with a small probability, such that the expected arrivals occur at some finite rate.

Think of a lemonade stand on a busy street – there’s a very large population of potential lemonade buyers, but only a small fraction actually stop for a drink. Normally, we don’t want to model the street and the traffic generation process, so it’s reasonable to assume independent arrivals from a large pool at some rate that we can measure, using the Poisson distribution. This is similar to using a cloud in SD to indicate a source or sink that we aren’t modeling. Continue reading “Bernoulli and Poisson are in a bar …”