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Topic 6 Probability

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1 views

Topic 6 Probability

Uploaded by

zoomotaku
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Probability

Learning outcome

• Understand the amount of uncertainty that is


involved before making important decisions.
• Perform several analyses with respect to business
decision involving uncertainty.
• Understand fundamentals of probability and various
probability rules that help to measure uncertainty.
Introduction

• Probability is a numerical measure of the likelihood


or chance of occurrence of an uncertain event.
(between 0 and 1)
Concepts of probability

Random Experiment: A random experiment is an
activitythat leads to the occurence of one and only
one of several possible outcomes that cannot be
predicted until it is completed.

Sample Space: A sample space, is a set of all
possible outcomes of a random experiment.

Random Variables: A random variable, is a variable
whose possible values are numerical outcomes of a
random experiment.

There are two types of random variables.

1. Discrete Random Variable is one which may take
on only a countable number of distinct values such as
0,1,2,3,4,…….. Discrete random variables are usually
(but not necessarily) counts.

2. Continuous Random Variable is one which takes
an infinite number of possible values. Continuous
random variables are usually measurements.

Event types: A single possible outcome of an
experiment is called a simple event.

An event is the set of one or more simple events of
an experiments in the sample space and having a
specific common characteristics.

Mutually exclusive events: If two or more events
cannot occur simultaneously in an experiment, then
such events are called mutually exclusive events.

Collective Exhaustive events: when all the possible
events that can occur from an experiment includes
every possible outcome.

Independent and dependent events: independent if
information about one tells nothing about the
occurrence of the other. Dependent if information
about one tells something about the other.

Compound events: when two or more events
occur in connection with each other, their
simultaneous occurrence is called compound event.

Equally likely event: if two or more events has
equal chance of occur .

Complementary events: two different sets of
elements in the sample space.
Probability

Probability is the measure of the likelihood that an
event will occur in a Random Experiment.

Probability is quantified as a number between 0 and
1, where, loosely speaking, 0 indicates impossibility
and 1 indicates certainty.

The higher the probability of an event, the more
likely it is that the event will occur.
Classical approach

• This approach is based on the assumption that all


possible outcomes are mutually exclusive and
equally likely.
• P(A)= number of favorable outcome/ total number
of possible outcomes

A simple example is the tossing of a fair coin.
Since the coin is fair, the two outcomes (“heads”
and “tails”) are both equally probable; the
probability of “heads” equals the probability of
“tails”; and since no other outcomes are possible,
the probability of either “heads” or “tails” is 1/2
(which could also be written as 0.5 or 50%).

Tickets are numbered 1 to 100. they are shuffled
and a ticket is drawn at random. What is the
probability that the drawn ticket has

(a) an even number

(b) the number 5 or multiple of 5

© a number which is greater than 75

(d) a number which is a square
Fundamental rules of probability


Each probbaility should fall between 0 and 1

The sum of probabilities of all simple events
constituting the sample space is 1.

P(Ā)=1-P(A)

Probability of an impossible event is zero
Addition theorem

If two events are mutually exclusive then the


probability of occurrence of either A or B is the
sum of the probabilities of A and B.

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

When events are not mutually exclusive

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

Two students A and B works independently on a
problem. The probability that A will solve it is ¾
and that of B is 2/3. What is the probability that the
problem will be solved
• Tickets are numbered from 1 to 100. They are well
shuffled and a ticket is drawn at random. What is
the probability that the drawn ticket has
• (a) an even number?
• (b) the number 5 or a multiple of 5?
• (c) a number which is greater than 75?
• (d) a number which is a square?
• Suppose an entire shipment of 1000 items is
inspected and 50 items are found to be defective.
Assume the defective items are not removed from
the shipment before being sent to a retail out let for
sale. If you purchase one item from this shipment,
what is the probability that it will be one of the
defective items?
Multiplication theorem


In order to find the probability of several events
occurring in succession, multiply the probabilities
of the individual events. Successive events can be
Independent or Dependent. Independent events are
not affected by each other.
Statistically Independent Events


When the occurence of an event does not affect
and is not affected by the probability of occurence
of any event, the event is said to be statistically
idependent event

There are three types of probabilities under this:
marginal, joint, condtional

Marginal probability: or unconditional is the simple
probability of the occurence of an event.

Joint probability: the probability of two or more
independent events occuring together or in succession
is called joint probability
like A and B are independent events the probability that
both A and B will occur
P(AB)= P(A intrs B)=P(A)*P(B)

Conditional probability: Porbability of a
particular event occuring, given that another event
has occured.

Statistical Dependent event: When the probability
of an event is dependent upon or affected by the
occurence of any other event, the event is said to
be statistically dependent

There are three types of probabilities under SDE
Joint, conditional and unconditional

Joint probability: if A and B are dependent events
then joint porbability will no longer equal to the
product of their respective probabilities

It is calculated as
P(A intrst B) =P(A)*P(B|A)

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