QBM 101 Business Statistics: Department of Business Studies Faculty of Business, Economics & Accounting HE LP University
QBM 101 Business Statistics: Department of Business Studies Faculty of Business, Economics & Accounting HE LP University
QBM 101 Business Statistics: Department of Business Studies Faculty of Business, Economics & Accounting HE LP University
Let
F = a person is in favor of genetic engineering
A = a person is against genetic engineering
FF = both persons are in favor of genetic
engineering
FA = the first person is in favor a nd the
second is
against
AF = the first is against and the second
is in favor
AA = both persons are against genetic
engineering
E XAMPLE 4-6
1. Classical Probability
Definition
Two or more outcomes (or events) t h a t have the
same probability of occurrence are said to be
equally likely outcomes (or events).
1
P(Ei )
Total number of outcomes for the experiment
1
P(head) 1
Total number of outcomes 2 .50
1
P(tail) 2 .50
E XAMPLE 4-8
2
P(a home in West Orange is selected) .40
5
T HREE C ONCEPTUAL A PPROACHES
TO P ROBABILITY
f
P( A) n
E XAMPLE 4-10
Ten of the 500 r a ndomly selected ca r s
manufactured a t a certain auto factory are found to
be lemons. Assuming t h a t the lemons are
manufactured randomly, what is the probability
t h a t the next car manufactured a t this auto
factory is a lemon?
490
P(good ) 500 0.98
10
P(lemon) 500
0.02
P P(good ) P(lemon) 0.98 0.02
T HREE C ONCEPTUAL A PPROACHES
TO P ROBABILITY
Definition
Subjective probability is the probability assigned to a n
event based on subjective judgment, experience,
information, and belief.
a. less t h a n $40,000
b. more t h a n $80,000
Suppose all 100 employees of a company were
asked whether they are in favor of or against
paying high salaries to CEOs of U.S. companies.
Table 4.3 gives a two way classification of the
responses of these 100 employees.
M ARGINAL P ROBABILITY
Definition
Marginal probability is the probability of a single
event without consideration of any other event.
Marginal probability is also called simple
probability.
C ONDITIONAL P ROBABILITY
Definition
Conditional probability is the probability t h a t a n
event will occur given t h a t another has already
occurred. If A a nd B are two events, then the
conditional probability A given B is written as
P( A| B)
and read as “the probability of A given t h a t B ha s
already occurred.”
E XAMPLE 4-12
Compute the conditional pr oba bility P (in favor
| male) for the da t a on 100 employees.
P( A B) 0
P( A B) P( A) P(B)
If two events A and B are NOT mutually exclusive,
then
P( A B) 0
P( A B) P( A) P(B)
E XAMPLE 4-14
Consider the following events for one roll of a die:
A= a n even number is observed= {2, 4, 6}
B= a n odd number is observed= {1, 3, 5}
C= a number less t h a n 5 is observed= {1, 2, 3, 4}
Are events A and B mutually exclusive? Are events A and C
mutually exclusive?
E XAMPLE 4-15
Consider the following two events for a randomly selected
adult:
Y = this adult has shopped on the Internet a t least
once
N = this adult has never shopped on the Internet
Are events Y and N mutually exclusive?
It is noticed t h a t events Y and N have no common
outcome. Hence, they are mutually exclusive.
I NDEPENDENT E VENTS
Definition
Two events are said to be independent if the
occurrence of one does not change the probability of
the occurrence of the other. In other words, A a nd
B are independent events if
P( A B) P( A) P(B) or
P( A | B) P( A) or
P(B | A) P(B)
E XAMPLE 4-16
36 40 81
P(F A) 0.36 P(F ) P( A)
0.324 or 100 100 100
40 36 4
P(F ) 0.4 P(F | A) 0.444
100 81 9
The two events are NOT independent. Or
the two events are dependent.
E XAMPLE 4-17
A box contains a total of 100 DVDs t h a t were
manufactured on two machines. Of them, 60 were
manufactured on Machine I. Of the total DVDs, 15 are
defective. Of the 60 DVDs t h a t were manufactured on
Machine I, 9 are defective. Let D be the event t h a t a
randomly selected DVD is defective, and let A be the
event t h a t a randomly selected DVD was manufactured
on Machine I. Are events D and A independent?
9
P(D A) 15 60
100 0.09 P(D) P( A) 100 100 0.09 or
15 9
P(D) 0.15 P(D | A)
0.15
100 60
The two events are independent.
E XAMPLE 4-17
C OMPLEMENTARY E VENTS
Definition
The complement of event A, denoted by Ā or A’, a nd
read as “A bar”, “A prime”, or “A complement,” is
the event t h a t includes all the outcomes for a n
experiment t h a t are not in A.
E XAMPLE 4-18
In a group of 2000 taxpayers, 400 have been audited by
the IRS a t least once. If one taxpayer is randomly selected
from this group, what are the two complementary events
for this experiment, and what are their probabilities?
Definition
The probability of the intersection of two
events is called their joint probability. It is written
as
P( A and B) P( A
B)
E XAMPLE 4-20
4
Alternative: P(F G) 40 0.1
E XAMPLE 4-21
A box contains 20 DVDs, 4 of which are defective. If two
DVDs are selected a t random (without replacement) from
this box, what is the probability t h a t both are defective?
P(C S ) 0.03
P(C | S ) 0.15
P(S )
0.20
M ULTIPLICATION R ULE
P(A a nd R) = 0
E XERCISE 4
4.80 In a statistics class of 54 students, 34 have
volunteered for community service in the past. If
two students are selected a t random from this
class, what is the probability t h a t both of them
have volunteered for community service in the
past? Draw a tree diagram for this problem.
A or B
P( A or B) P( A B)
E XAMPLE 4-26
A senior citizen center ha s 300 members. Of them,
140 are male, 210 take a t least one medicine on a
permanent basis, and 95 are male and take a t least
one medicine on a permanent basis. Describe the
union of the events “male” and “take a t least one
medicine on a permanent basis.”
95 115 45 255
P(M A) 0.85
or
300
140 210 95 255
P(M A) P(M ) P( A) P(M A) 300 300 300 0.85
300
300
E XAMPLE 4-27
A university president ha s proposed t h a t all
students m us t take a course in ethics as a
requirement for graduation. Three hundred faculty
members a nd students from this university were
asked about their opinion on this issue. Find the
probability t h a t one person selected a t random
from these 300 persons is a faculty member or is
in favor of this proposal.
E XAMPLE 4-27
Original formula:
P( A B) P( A) P(B) P( A
B) P( A B) 0
P( A B) P( A) P(B) 0
P( A B) P( A) P(B)
E XAMPLE 4-30
Consider the experiment of rolling a die twice.
Find the probability t h a t the sum of the numbers
obtained on two rolls is 5, 7, or 10.
P(sum is 5 or 7 or 10)
= P(sum is 5) + P(sum is 7) + P(sum is 10)
= 4/36 + 6/36 + 3/36 = 13/36 = .3611
E XAMPLE 4-31
The probability t h a t a person is in favor of genetic
engineering is .55 and t h a t a person is against it is .45.
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 t h a t a t least one of the two
persons favors genetic engineering.
a) Let
F = a person is in favor of genetic engineering
A = a person is against genetic engineering
Total outcomes = 2 x 3 = 6
E XAMPLE 4-34
A National Football League t eam will play 16
games during a regular season. Each game can
result in one of three outcomes: a win, a loss, or
a tie. The total possible outcomes for 16 games
are calculated as follows:
Definition
The symbol n!, read as “n factorial,” represents
the product of all the integers from n to 1.
In other words,
By definition,
0! = 1
E XAMPLE 4-35, 4-36, 4-37, 4-38
Evaluate 7!
7! = 7 · 6 · 5 · 4 · 3 · 2 · 1 = 5040
Evaluate 10!
10! = 10 · 9 · 8 · 7 · 6 · 5 · 4 · 3 · 2 ·
1
= 3,628,800
Evaluate (12-4)!
(12-4)! = 8! = 8 · 7 · 6 · 5 · 4 · 3 · 2 ·
1
= 40,320
Evaluate (5-5)!
(5-5)! = 0! = 1
Combin a tions
Definition
6
C2 6! 6! 6 5 4 3 2 1
2!(6 2)! 2!4! 2 1 4 3 2
1
Th u s, t he
15re a r e 15 wa ys for Kristen to select
tw o ice cream flavors out of six.
E XAMPLE 4-40
Three members of a jury will be randomly selected
from five people. How many different
combinations are possible?
n = 5 and x = 3
5! 6 5 4 3 2 1
5
C3 5!
3!(5
3)!
10
3!2! 3 2 1 2 1
E XAMPLE 4-41
Marv & Sons advertised to hire a financial analyst.
The company has received applications from 10
candidates who seem to be equally qualified. The
company manager has decided to call only 3 of
these candidates for a n interview. If she randomly
selects 3 candidates from the 10, how many total
selections are possible?
n = 10 a nd x = 3
C3
10
120
P e rm uta tions
Notation
n = 20 , x = 3
20!
P (20
20 3 201918
6840
3)!
E XERCISE 6
4.122 A small ice cream shop has 10 flavors of ice
cream a nd 5 kinds of toppings for its sundaes. How
many different selections of one flavor of ice cream
a nd one kind of topping are possible?