TOPIC 4: PROBABILITY

Learning Objectives: Explain and illustrate the meaning of the following probability concepts: - mutually exclusive events - independent events Apply the laws of addition and multiplication to solve basic probability problems. Solve basic probability problems involving conditional probability. Apply tree techniques to solve probability 1

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Definitions
A probability is a measure of the likelihood that an event in the future will happen, is denoted by P. It can only assume a value between 0 and 1. A value near zero means the event is not likely to happen. A value near one means it is likely.

Two Properties of Probability:

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Probability Examples

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Definitions continued An experiment is the observation of some activity or the act of taking some measurement. An outcome is the particular result of an experiment. An event is the collection of one or more outcomes of an experiment.
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Examples:

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Classical Probability Rule to Find Probability:
P(A) = Number of outcomes favorable to A Total number of outcomes for the experiment

Example: 1. Find the probability of obtaining a head and the probability of obtaining a tail for one toss of a coin. 2. Find the probability of obtaining an even number in one roll of a die. 3. In a group of 500 women, 80 have played golf at least once. Suppose one of these 500 women is randomly selected. What is the probability that she has played golf at least once? 6

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Conditional Probability- is the probability that an event will occur given that another event has already occurred. If A and B are two events, then the conditional probability of A given B is written as P(A B) and read as the probability of A given that B has already occurred Example: Two-Way Classification of Employee Responses with Totals In Favor Against Total
Male Female Total 15 4 19 45 36 81 60 40 100
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1. Compute the conditional probability P (in favor male) for the data on 100 employees given in the table above.
2. Calculate the conditional probability that a randomly selected employee is a female given that this employee is in favor of paying high salaries to CEOs. SOLUTIONS:

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Events are mutually exclusive if the occurrence of any one event means that none of the others can occur at the same time. Simply events that cannot occur together are said to be mutually exclusive events. Example: 1. Consider the following events for one roll of a die: A = an even number is observed = {2, 4, 6} B = an odd number is observed = {1, 3, 5} C = a number less than 5 is observed = {1, 2, 3, 4} Are events A and B mutually exclusive? Are events A and C mutually exclusive?
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Example cont 2. Consider the following two events for a randomly selected adult: Y = this adult has shopped on the internet at least once N = this adult has never shopped on the internet. Are events Y and N mutually exclusive?

SOLUTIONS:

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Events are independent if the occurrence of one does not affect the probability of the occurrence of the other. In other words, A and B are independent events if either P(A B) = P(A) or P(B A) = P(B) Example: 1. Refer to the information on 100 employees given in the previous table above. Are Events female (F) and in favor (A) independent?
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Example: 2. A box contains a total of 100 CDs that were manufactured on two machines. Of them, 60 were manufactured on Machine 1. of the total CDs, 15 are defective. Of the 60 CDs that were manufactured on Machine 1, 9 are defective. Let D be the event that a randomly selected CD is defective, and let A be the event that randomly selected CD was manufactured on Machine 1. Are events D and A independent? SOLUTION:
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Rules for Computing Probabilities
1. Rules of Addition Special Rule of Addition - If two events A and B are mutually exclusive, the probability of one or the other events occurring equals the sum of their probabilities. P(A or B) = P(A) + P(B) The General Rule of Addition - If A and B are two events that are not mutually exclusive, then P(A or B) is given by the following formula: P(A or B) = P(A) + P(B) - P(A and B)
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Example: What is the probability that a card chosen at random from a standard deck of cards will be either a king or a heart?

P(A or B) = P(A) + P(B) - P(A and B) = 4/52 + 13/52 - 1/52 = 16/52, or .3077
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Rules for Computing Probabilities 2. Special Rule of Multiplication
The special rule of multiplication requires that two events A and B are independent. Two events A and B are independent if the occurrence of one has no effect on the probability of the occurrence of the other. This rule is written: P(A and B) = P(A)P(B)

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Example: A survey by the American Automobile association (AAA) revealed 60 percent of its members made airline reservations last year. Two members are selected at random. What is the probability both made airline reservations last year?
SOLUTION

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Solution: The probability the first member made an airline reservation last year is .60, written as P(R1) = .60 The probability that the second member selected made a reservation is also .60, so P(R2) = .60. Since the number of AAA members is very large, you may assume that R1 and R2 are independent.
P(R1 and R2) = P(R1)P(R2) = (.60)(.60) = .36
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General Multiplication Rule
The general rule of multiplication is used to find the joint probability that two events will occur. Use the general rule of multiplication to find the joint probability of two events when the events are not independent. It states that for two events, A and B, the joint probability that both events will happen is found by multiplying the probability that event A will happen by the conditional probability of event B occurring given that A has occurred.

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Example: A golfer has 12 golf shirts in his closet. Suppose 9 of these shirts are white and the others blue. He gets dressed in the dark, so he just grabs a shirt and puts it on. He plays golf two days in a row and does not do laundry. What is the likelihood both shirts selected are white? SOLUTION

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SOLUTION: The event that the first shirt selected is white is W1. The probability is P(W1) = 9/12 The event that the second shirt selected is also white is identified as W2. The conditional probability that the second shirt selected is white, given that the first shirt selected is also white, is P(W2 | W1) = 8/11. To determine the probability of 2 white shirts being selected we use formula: P(AB) = P(A) P(B|A) P(W1 and W2) = P(W1)P(W2 |W1) = (9/12)(8/11) = 0.55
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Tree Diagrams A tree diagram is useful for portraying conditional and joint probabilities. It is particularly useful for analyzing business decisions involving several stages. A tree diagram is a graph that is helpful in organizing calculations that involve several stages. Each segment in the tree is one stage of the problem. The branches of a tree diagram are weighted by probabilities.
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Example: The probability that a person is in favor of genetic engineering is 0.55 and that a person is against it is 0.45. the two persons are randomly selected, and it is observed whether they favor or oppose genetic engineering. a.) Draw a tree diagram for this experiment. b.) Find the probability that at least one of the two persons favors genetic engineering.
SOLUTION
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