I beg to disagree. 

The Binomial Distribution is done with replacement. 

The 80/80 rule is supposed to be done without replacement. 
Therefore, the only discrete distribution which satisfies 
the question -  

  What is the probability that M samples of a sample 
  population S will pass/fail when S is taken from a total 
  population N with an expected pass/fail rate of P/F? 

without replacement is the HyperGeometric Distribution. 

In other words, the HyperGeometric Distribution answers 
the question -  if your company makes a total of 100 
products per month and you expect 20 of them to fail, 
what's the probability that 2 samples of a random sample 
of 10 being tested without replacement each month will 
also fail?  

The HyperGeometric Distribution says in such a scenerio 
that the chances 2 samples will fail are 31.8%.  Also, the 
probability that 3 samples in the above given conditions 
will fail is 20.9%.  Which makes for some odd interpretations.  

But in any event, even though you think you're working with 
an 80% success rate, you have only a 70% confidence level. 

Now, I'm certainly no statistical expert, but I believe the 
Binomial and Hypergeometric distributions become nearly 
equal in results only with large numbers. 

You can play around with this on Excel since the various 
distributions are built-in spreadsheet functions. 

- Doug 



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