Lean Six Sigma Green Belt

Certification Course
Probability and Statistics
 Learning Objectives

By the end of this lesson, you will be able to:

Outline probability basics

Explain permutations and combinations

List the addition and multiplication rules

 Roles of Probability and Statistics
Business

Business phrase 3 out of 4 dentists choose whitening

toothpaste

Economics

To understand the relationship between supply and

demand

Banking

$ To estimate
number of people making deposits vs.
number of people requesting loans

Government

To design federal based on statistical data to estimate

budgets expected expenditure and revenue
Probability Basics and Statistical Rules
 Probability

Probability refers to the chance of something occurring or happening.

Random Experiment Elementary Outcomes Sample Space

{HT}

• A chance All possible results Set of elementary

event • Heads outcomes
• A single coin • Tails
toss
 Probability: Characteristic Properties

PROPERTY 2 PROPERTY 3
Impossible event Certain event

PROPERTY 1
 Probability of an event 
0 to 1

! The total probability of the sample space or all elementary outcomes must be 100% or 1.
 Probability of an Event

For a particular event, if:

N – possible outcomes that are equally likely

f – a specific type of event or outcome

f
Then, Probability of the event =
N

Example:

In an event of a coin toss, what is the probability of getting a “head”?

• There is a probability of one of two possible outcomes, head or tail.

f 1
P H = =
N 2
 Probability: Example

What is the probability of getting a three followed by two when the dice are thrown twice?

Experiment: Rolling 1 dice twice

Desired event: roll 1 = 3; roll 2 = 2

The probability of getting a 3 followed by 2 can happen only in one way:

Total number of events 1

Probability of an event = = = 2.7%
Total number of 𝑜𝑢𝑡𝑐𝑜𝑚𝑒𝑠 36
 Probability: Basic Operations

An Event is a set of elementary outcomes.

The Probability of an Event = Sum of the Probabilities of the Outcomes in the Set

Example: Some events of rolling a dice twice.

Event Elementary Outcomes Probability

A: Dice add up to 3 { (1,2),(2,1) } P(A) = 2/36 = 5.5%
B: Second roll is a 2 { (1,2), (2,2), (3,2), (4,2), P(B) = 6/36 =16.7%
(5,2), (6,2) }

We can combine events to make other events using AND, OR, or NOT.
 Probability Concepts

Mutually Exclusive Events Mutually Inclusive Events

Event 1 Event 2 Event 1 Event 2

Relates to the Addition or OR rule

Addition Rule for Mutually Inclusive Events

In the scenario from the previous screen:

Event A: Dice add up to 3 ; Event B: Second roll is a 2.

• A OR B is the entire shaded

area where either event
occurs.

• A AND B is the darker shaded

area where both shaded areas
overlap (dice add up to 3 and
second roll is a 2).

P( A or B) = P(A) + P(B) – P (A and B)

ADDITION RULE for Mutually Inclusive Events

2/36 + 6/36 – (1/36) = 7/36 = 19.4%

 Addition Rule for Mutually Inclusive Events

Sometimes, there is no overlap shared between outcomes between A and B.

Event A: Dice add up to 3 ; Event B: Second roll is a 4.

• A OR B is the entire
shaded area where
either event occurs.

P( A or B) = P(A) + P(B)

ADDITION RULE for Mutually Exclusive Events

2/36 + 6/36 = 8/36 = 22.2%

 Subtraction Rule Or Not Rule

Used when it’s easier to calculate the opposite probability

Event A: Double 2’s NOT thrown (The event “NOT A” is a Double 2 is thrown.)

P(A) = 1 - P(NOT A)

Subtraction RULE

1 – 1/36 = 35/36 = 97.2%

 Probability Concepts

Independent events Dependent events

Probability of Probability of
occurrence of one occurrence of one
event event

affect / influence
does NOT affect / influence

Probability of Probability of
occurrence of another occurrence of another
event event

Relates to the Multiplication or AND rule

 Multiplication Rules for Independent Events

The Multiplication Rules or AND rules depend on the event dependency.

Example Special multiplication rule is applied

If events A, B, C, . . . are independent

P (A & B & C & …) = P(A) ∗ P(B) ∗ P(C)...

 Multiplication Rules for Independent Events: Example

What is the probability of occurrence of all the following events?

P(A & B & C) = P(A) ∗ P(B) ∗ P(C)

Flip a coin and get a head, draw a card 1 1 1
and get an ace, and throw a dice and get a = ∗
2 13
∗
6
1.
= 0.0064 = 0.64%

A
 Second Rule For Dependent Variables

Example General multiplication rule is applied

If A and B are two dependent events

P(A ∩ B) = P(A) ∗ P(B|A)

P(B|A) = P(B and A)/ P(A)

 Second Rule For Dependent Variables: Example

A bag contains 6 golden coins and 4 silver coins. Two coins are drawn without replacement from the
bag. What is the probability that both of the coins are silver?

4 3
P(A) = ; P(B|A) =
10 9

P(A ∩ B) = P(A) ∗ P(B|A)

4 3 12
= ∗ =
10 9 90

= 0.1334 = 13.34%
 Permutation

Permutation is the total number of ways in which a

set, group, or number of things can be arranged.

nP n!
r= p (n, r) =
(n−r)!

n = number of total items

r = number of selections or group size
x! = x * (x-1) *(x-2)*…*(x-(x-1))
 Combination

The unordered arrangement of a set, group, or

number of things is known as combination.

nC n!
r = c (n, r) = r! (n−r)!

n = number of total items

r = number of selections or group size
x! = x * (x-1) *(x-2)*…*(x-(x-1))
 Permutation and Combination: Example

From a group of 10 employees, a company has to select 4 for a particular project. In how many ways can the selection
happen, given the following conditions?
a. The arrangement of employees needs to be different due to 4 different team roles.
b. The arrangement of employees need not be different because each member will have the same role.

Here, n = 10 and r = 4
a. From a group of 10 employees, 4 employees need to be selected. The arrangement needs to be different.
nP n! 10!
r = p (n, r) = (n−r)!
= 10 P 4 = p (10, 4) =
(10−4)!
= 5040 ways
[EXCEL “=PERMUT(10,4)” =5040]

b. From a group of 10 employees, 4 have to be selected. The arrangement of these 4 employees need not be different.
nC n! 10!
r = c (n, r) = r! (n−r)!
= 10 C 4 = c (10, 4) =
4! (10−4)!
= 210 ways
[EXCEL “=COMBIN(10,4)” =210]

Use Excel functions “= PERMUT( )” and “= COMBIN( )”

 Key Takeaways

Probability refers to the chance of something occurring or

happening.

P(E) = "Probability of an event"=𝒇/𝑵

When the probability of occurrence of an event does not

affect the probability of the occurrence of another event, then
the two events are said to be independent.

When the probability of one event occurring influences the

likelihood of another event, the events are said to be
dependent.

Permutation is the total number of ways in which a set, group,

or number of things can be arranged.

The unordered arrangement of a set, group, or number of

things is known as combination.
Knowledge Check
Knowledge
Check You have two cars. The probability of each one starting is 60%. What is the likelihood
1 that at least one car starts?

A. 36%

B. 64%

C. 84%

D. 24%
 Knowledge
Check You have two cars. The probability of each one starting is 60%. What is the likelihood
1 that at least one car starts?

A. 36%

B. 64%

C. 84%

D. 24%

The correct answer is C

P(A) is car 1 starting and P(B) is car 2 starting.

P (A OR B) = P(A) + P(B) – P(A AND B) = .6 + .6 – (.36) = 1.2 - .36 = .84 = 84%
Knowledge
Check You want to list three desserts from a menu of nine. How many different ways can this
2 be done?

A. 504

B. 84

C. 27

D. 12
 Knowledge
Check You want to list three desserts from a menu of nine. How many different ways can this
2 be done?

A. 504

B. 84

C. 27

D. 12

The correct answer is B

This a combination problem since the order in which the desserts are listed is not of concern. Therefore, using the
EXCEL function “=COMBIN(9,3)”, the resulting value is 84.
Knowledge
Check You want to list your three favorite desserts in order from a menu of 11. How many
3 different ways can this be done?

A. 990

B. 165

C. 33

D. 14
 Knowledge
Check You want to list your three favorite desserts in order from a menu of 11. How many
3 different ways can this be done?

A. 990

B. 165

C. 33

D. 14

The correct answer is A

This a permutation problem because the order that the desserts are listed in is of concern. Therefore, the EXCEL
function to be used is “=PERMUT(11,3)”, which results in the value 990.