Indian Institute of Management Rohtak

Course Outline

Course Title : Probability Analysis

Credits : 0.5
Type : Compulsory
Session Duration : 75 minutes
Term : I
Year : 2023
Faculty : Dr. Aditya K. Sahu, Dr. Anurag Tiwari, Dr. C P Garg,
. Dr. Ujjwal Nag
_______________________________________________________________________

Introduction
In the era of data, it is indeed a requirement for the managers to understand the data usage
in decision-making and problem solving by appropriate quantitative techniques. It is also
necessary to know how to formulate a problem analytically in the context of different
management situations. Therefore, the course titled “Probability Analysis” is designed with
a focus to build the analytical skill set among the participants. This course would help the
participants to understand the concept of probability, randomness and address it in different
settings in the form of various discrete and continuous probability distributions.
Learning Objectives
1. Understand the fundamental concepts of probability of basic principles of
counting, permutations, and combinations to solve business problems involving
probability.
2. Gain proficiency in calculating probabilities using common probability
distributions such as the binomial, normal, Poisson distributions, and other
discrete and continuous random variable probability distributions to solve
business management problems.
3. Apply various techniques, such as probability trees and Bayes' theorem, to solve
problems involving probability.
4. Develop skills in applying probability analysis to real-world business problems,
such as risk assessment, reliability analysis, and decision-making under
uncertainty.

1
Pedagogy
The pedagogy would be a mix of Lecture, Discussion, Group exercises in class, Case
Analysis, Assignments, Quizzes, and Project Work.

Evaluation Scheme
Quizzes 25%
Assignment 25%
Class Participation 10%
Final Exam 40%

Brief Outline
Module1: Summarizing and Exploring Data, Descriptive Statistics
Module2: Concept of Probability, Independence of Events, Bayes Theorem
Module 3: Discrete and Continuous probability distributions
Module4: Decision Tree and Decision Analysis
References
1. Text Book- Statistics for Business and Economics by Anderson, Sweeney, Williams,
Camm, Cochran (SBE)
2. Reference Book: Quantitative Methods for Business by Anderson, Sweeney, Williams,
Camm, Martin (QMB)
3. Other Materials (To be provided in course pack)
a) Decision Analysis by George Wu and Cathleen Mcginn
b) Discrete Probability Distribution by Apratim Guha
c) Continuous Probability Distribution by Apratim Guha
d) An Introductory Course in Probability Management by Prof. Karthik Sriram
(ICPM)

2
 Session Plan (SLOT - 2)
Topic Session Topic and Sub-topics Reference Case /
No. No. (Book chapter / Exercise /
Page numbers Assignment
from the
book/Additiona
l readings)

1. 1-2 Types of Variables Chapter1 &2 Ch 2. Case 1:

1.Summarization of Categorical and Numerical SBE Pelican Stores
Variables (Numerical and Graphical Techniques) (SBE)
2. Frequency Distribution
3. Graphical Techniques (Histograms, Frequency Case 2. Motion
Polygons, Ogives, Pie Chart, Pareto Chart Etc.)\ Picture
4.Measures of Central Tendency and Variability, Industries
Measures of Shape, Measures of Associations) (SBE)
5.Summarizing Bivariate Data

2. 2 Probability theory and Its Applications in 1.Chapter 4

Management SBE
Chapter 1
• Definition Of Probability (Classical and ICPM
axiomatic approach)
• Basic Terminologies: Random Experiment,
Sample Space, Event etc.
• Set Theoretic Operations Involving Events

3 • Random Variable (Discrete and continuous 1.Chapter 4 Which

Random Variable), Probability Function &Chapter 5 probability do
• General Addition Rule of Probability, SBE we have to
Some inequalities 2. Chapter 1 & meet? A case
• Conditional Probability and independence Chapter 3 study about
of Events ICPM statistical and
classical
approach to
probability in

3
 students’
behaviour.
4 • Multiplication Law, Law of Total 1.Chapter 4 Ch 5 Case:
Probability, Bayes’ Theorem and their &Chapter 5 Hamilton
applications SBE County’s
• Probability Mass Function, Probability 2. Chapter 3 Judges (SBE)
Density Function and Cumulative ICPM
Distribution Function

5 • Expected Value, Variance, Skewness, 1.Chaper 5 SBE Ch. 3 Case:

Curtosis and Other Parameters of a 2. Chapter 4 Business
Distribution ICPM schools of
• Jointly Distributed Random Variables and Asia-Pacific
Covariance (SBE)
• Chebyshev’s Inequality
3. 6-7 • Discrete Probability Distributions ( 1.Chapter 5 Ch. 5 Case: Go
Discrete Uniform Distribution, Bernoulli SBE Bananas (SBE)
Distribution, Binomial Distribution, 2. Discrete
Geometric Distribution, Poisson Probability
Distribution, Hypergeometric Distribution Distribution by
) and their different Properties. Apratim Guha
Applications of different Discrete
Probability Distributions.

8-9 • Continuous Probability Distributions 1.Chapter 6 Ch. 6 Case

(Continuous Uniform Distribution, SBE Speciality Toys
Exponential Distribution, Normal 2. Continuous (SBE)
Distribution, Standard Normal Probability
Distribution) and their Properties. Distribution by
Applications of different Continuous Apratim Guha
Probability Distributions.

4. 10 • Decision Analysis 1.Chapter 4 Case:

• Decision Tree and its applications as a QMB Hawthorne
Decision making tool 2. Decision Plastics
Analysis by HBS 171004-
George Wu and PDF-ENG
Cathleen
Mcginn

4
 Table of Contents
Sl. No. Reading/ Reading / Case Title Session
Case No. No.
1 R1 Chapter1 SBE 1
2 R2 Chapter2 SBE 1
4 R3 Chapter 4 SBE 2
5 R4 Chapter 1 ICPM 2
6 R5 Chapter 4 SBE 3
7 R6 Chapter 5 SBE 3
8 R7 Chapter 1 ICPM 3
9 R8 Chapter 3 ICPM 3
9 R9 Chapter 4 SBE 4
10 R10 Chapter 5 SBE 4
11 R11 Chapter 3 ICPM 4
12 R12 Chapter 5 SBE 5
13 R13 Chapter 4 ICPM 5
14 R14 Chapter 6 SBE 8
15 R15 Continuous Probability Distribution by 9
Apratim Guha
16 R16 Chapter 4 QMB 10
17 R17 Decision Analysis by George Wu and Cathleen 10
Mcginn
19 C1 Ch 2. Case 1: Pelican Stores (SBE) 1
20 C2 Ch 2. Case 2. Motion Picture Industries 2
(SBE)
21 C3 Which probability do we have to meet? A case 3
study about statistical and classical approach to
probability in students’ behaviour.
22 C4 Ch 4 Case: Hamilton County’s Judges (SBE) 4
23 C5 Ch 5 Case: Go Bananas (SBE) 5
23 C6 Ch. 6 Case Speciality Toys (SBE) 6
24 C7 Case: Hawthorne Plastics HBS 171004-PDF- 10
ENG

Note: ‘R’ and ‘C’ in the second column stand for ‘Reading’ and ‘Case’ respectively.