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Week 1 Ex

The document is an exercise for a Decision Analysis course at The Hong Kong Polytechnic University, covering basic probability concepts, independent events, joint probability distributions, and practical applications in statistics. It includes questions on probability laws, mutually exclusive events, sampling techniques, and calculations involving expected costs and variances for computer breakdowns. Additionally, it prompts analysis of subscription renewal trends.

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2 views2 pages

Week 1 Ex

The document is an exercise for a Decision Analysis course at The Hong Kong Polytechnic University, covering basic probability concepts, independent events, joint probability distributions, and practical applications in statistics. It includes questions on probability laws, mutually exclusive events, sampling techniques, and calculations involving expected costs and variances for computer breakdowns. Additionally, it prompts analysis of subscription renewal trends.

Uploaded by

leolee696
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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THE HONG KONG POLYTECHNIC UNIVERSITY

DEPARTMENT OF APPLIED MATHEMATICS

Decision Analysis (AMA4840)

Exercise 1

1. What are the two basic laws of probability?

2. What is the meaning of mutually exclusive events? What is meant by collectively


exhaustive? Give an example of each.

3. David teaches two undergraduate statistics courses at Victoria College. The class
for Statistics 201 consists of 7 sophomores and 3 juniors. The more advanced course,
Statistics 301, has 2 sophomores and 8 juniors enrolled. As an example of a business
sampling technique, David randomly selects, from the stack of Statistics 201
registration cards, the class card of one student and then places that card back in the
stack. If that student was a sophomore, David draws another card from the Statistics
201 stack; if not, he randomly draws a card from the Statistics 301 group. Are these two
draws independent events? What is the probability of

(a) a junior's name on the first draw?


(b) a junior's name on the second draw, given that a sophomore's name was drawn first?
(c) a junior's name' on the second draw, given that a junior's name was drawn first?
(d) a sophomore's name on both draws?
(e) a junior's name on both draws?
(f) one sophomore's name and one junior's name on the two draws, regardless of order
drawn?

4. Consider the following joint probability distribution for uncertain quantities


X and Y:
P(X = -2 and Y = 2) = 0.2
P(X = -1 and Y = 1) = 0.2
P(X = 0 and Y = 0) = 0.2
P(X = 1 and Y = 1) = 0.2
P(X = 2 and Y = 2) = 0.2

(a) Calculate
P(Y = 2), P(Y = 2 | X = 2), P(Y = 2 | X = -2), P(Y = 2 | X = 0).
(b) Calculate
P(X = -2), P(X = -2 | Y = 2), P(X = -2 | Y = 0).
(c) Are X and Y dependent and independent? What is the relationship between X and Y?

5. If P(A | B) = p, must P(A | 𝐵") = 1-p? Explain.


6. P(A)=0.68, P(B | A)=0.3, and P(B | 𝐴̅)=0.02. Construct a probability table.

7. A company owns two different computers, which are in separate buildings and
operated entirely separately. Based on past history, Computer 1 is expected to break
down 5 times a year, with a variance of 6, and costing $200 per breakdown. Computer
2 is expected to break down 3.6 times per year, with a variance of 7, and costing $165
per breakdown. What is the company’s expected cost for computer breakdowns and the
variance of the breakdown cost? What assumption must you make to find the variance?

8. For the following numbers for the renewals of subscriptions to the magazine:

Do the data represent good news or bad news regarding renewal trends?

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