Introduction To Probability

Introduction to Probability
Copyright 2014 Pearson Education, Inc.
4-1
Learning Outcomes
Outcome 1. Understand the three approaches to assessing probabilities.
Outcome 2. Be able to apply the Addition Rule.
Outcome 3. Know how to use the Multiplication Rule.
4-2
4.1 The Basics of Probability

Probability
The chance that a particular event will occur
The probability value will be in the range 0 to 1
Experiment
A process that produces a single outcome
whose result cannot be predicted with certainty
Sample Space
The collection of all outcomes that can result
from a selection, decision, or experiment.
4-3
Sample Space Examples

Example 1: All 6 faces of a die:
Example 2: All 52 cards of a deck of cards:
4-4
Defining the Sample Space

Step 1: Define the experiment
For example, the sale. The item of interest is the product sold
Step 2: Define the outcomes for one trial of

the experiment
Outcomes: e1 - Hamburger, e2 Cheeseburger, e3 Bacon Burger
Step 3: Define the sample space (SS)

For single sale: SS = {e1, e2, e3}
If experiment includes two sales, there will be nine outcomes:
SS = {o1, o2, o3, o4, o5, o6, o7, o8, o9}
o1={e1, e1}, o2={e1, e2}, o3={e1, e3}, o4={e2, e1}, . . . , o9={e3, e3}
4-5
Tree Diagrams
A useful way to define the sample space
Three students were asked if they like statistics
Step 2: Define the outcomes

Possible outcomes are: No and Yes
Step 3: Define the sample space for three trials

using a tree diagram
For a single trial:
4-6
Tree Diagram
4-7
Event of Interest
A collection of experimental outcomes
Two randomly chosen audits
Step 2: List the outcomes associated with

one trial of the experiment
Outcomes: audit done early, on time, or late
4-8
Event of Interest
Step 3: Define the sample space
There are nine experimental outcomes for two audits
e1={early, early}, e2={early, on time}, e3={early, late},
e4={on time, early}, e5={on time, on time}, e6={on time, late},
e7={late, early}, e8={late, on time}, e9={late, late}
Step 4: Define the event of interest

At least one audit is completed late:
E = {e3, e6, e7, e8, e9}
4-9
Types of Events
Mutually Exclusive Events
Two events are mutually exclusive if the occurrence of
one event precludes the occurrence of the other event.
Independent Events
Two events are independent if the occurrence of one
event in no way influences the probability of the
occurrence of the other event.
Dependent Events
Two events are dependent if the occurrence of one
event impacts the probability of the other event
occurring.
4-10
Events Examples
Mutually exclusive
The product can be either good of defective
Independent
E1 = heads on one flip of fair coin

E2 = heads on second flip of same coin
Result of second flip does not depend on the result of the first flip
Dependent
E1 = rain forecasted on the news

E2 = take umbrella to work
Probability of the second event is affected by the occurrence of

the first event
4-11
Assigning Probability
Methods of
Assigning Probability
Classical
Probability
Assessment
Relative
Frequency
Assessment
Subjective
Probability
Assessment
P(Ei) = Probability of event Ei occurring
4-12
Classical Probability Assessment

The method is based on the ratio of the
number of ways an outcome or event of
interest can occur to the number of ways
any outcome or event can occur when the
individual outcomes are equally likely.
4-13
Classical Probability Assessment

Step 2: Determine whether the possible
outcomes are equally likely
Step 3: Determine the total number of
outcomes
Step 5: Determine the number of outcomes
associated with the event of interest
Step 6: Compute the classical probability
4-14
Relative Frequency Probability

Assessment
The method defines probability as the
number of times an event occurs divided
by the total number of times an experiment
is performed in a large number of trials.
Ei - The event of interest

N - Number of trials
4-15
Relative Frequency Probability

Assessment
Step 2: Define the events of interest
Step 3: Determine the total number of
occurrences
Step 4: For the event of interest, determine
the number of occurrences
Step 5: Determine the relative frequency
probability assessment.
4-16
Subjective Probability Assessment

The method defines probability of an event
as reflecting a decision makers state of
mind regarding the chances that the
particular event will occur
Represents a persons belief that an event
will occur
Only approximate guide to the future
4-17
4.1 The Rules of Probability

Probability Rules
Possible Values
Summation of
Possible Values
Addition Rule for

Any Two Events
Conditional
Probability for
Independent Events
Addition Rule for

Mutually Exclusive
Events
Multiplication Rule
for Any Two Events
Conditional
Probability for Any
Two Events
Multiplication Rule
for Independent
Events
Addition Rule for

Individual Outcomes
Complement Rule
4-18
Possible Values and Summation

Rules
Probability Rule 1
Probability Rule 2
Probability of event occurring

is always between 0 and 1.
Sum of the probabilities of all

possible outcomes is 1.
For any event Ei

0 P(Ei) 1 for all i
0 = no chance of occurring
1 = 100% chance of occurring
k - Number of outcomes in the

sample
ei - ith outcome
4-19
Addition Rule for Individual

Outcomes
Probability Rule 3
The probability of an event Ei is equal to the sum

of the probabilities of the individual outcomes
forming Ei
For example, if Ei = {e1, e2, e3} then
P(Ei) = P(e1) + P(e2) + P(e3)
4-20
Addition Rule for Individual

Outcomes
Step 2: Define the possible outcomes
Step 3: Determine the probability of each
possible outcome
Step 5: Apply Probability Rule 3 to
compute the desired probability
4-21
Complement Rule
The complement of an event E is the collection of
all possible outcomes not contained in event E
The probability of the complement of event
E is 1 minus the probability of event E
P(E) = 1 - P(E)
This rule is corollary to Probability Rules 1 and 2
4-22
Addition Rule for Any Two Events

Probability Rule 4
P(E1 or E2) = P(E1) + P(E2) - P(E1 and E2)
4-23
Addition Rule for Any Two Events

Step 1: Define the Experiment
Step 2: Define the events of interest
Step 3: Determine the probability for each
event
Step 4: Determine whether the two events
overlap, and if so, compute the joint
probability
Step 5: Apply Probability Rule 4 to compute
the desired probability
4-24
Addition Rule for Any Two Events Example

P(Red or Ace) = P(Red) + P(Ace) - P(Red and Ace)
P(Red or Ace) = 26/52 + 4/52 - 2/52 = 28/52
Type
Color
Red
Black
Total
Ace
Non-Ace
24
24
48
Total
26
26
52
Dont count
the two red
aces twice!
4-25
Addition Rule for Mutually

Exclusive Events
Probability Rule 5
P(E1 or E2) = P(E1) + P(E2)

Both events cannot occur at the same time:
P(E1 and E2) = 0

4-26
Conditional Probability for Any Two

Events
Conditional Probability
The probability that an event will occur given
that some other event has already happened.
Probability Rule 6
Given that
4-27
Conditional Probability Example
CD
No CD
Total
AC
0.2
0.5
0.7
No AC
0.2
0.1
0.3
Total
0.4
0.6
1.0
4-28
Conditional Probability for

Independent Events
Probability Rule 7
For independent events E1, E2
P(E1|E2) = P(E1)
P(E2|E1) = P(E2)
P(E2) > 0
P(E1) > 0
The conditional probability of one event occurring,

given a second independent event has already occurred,
is simply the probability of the first event occurring.
4-29
Multiplication Rule for Any Two

Events
If we do not know the joint relative
frequencies the multiplication rule for two
events can be used
Probability Rule 8
For two events E1 and E2

P(E1 and E2) = P(E1) P(E2|E1)
4-30
Multiplication Rule Tree Diagram

P(E1 and E3) = 0.8 x 0.2 = 0.16
Car: P(E4|E1) = 0.5
Gasoline
P(E1) = 0.8
Diesel
P(E1) = 0.2
P(E1 and E4) = 0.8 x 0.5 = 0.40

P(E1 and E5) = 0.8 x 0.3 = 0.24
P(E2 and E3) = 0.2 x 0.6 = 0.12

Car: P(E4|E2) = 0.1
P(E2 and E4) = 0.2 x 0.1 = 0.02

P(E3 and E4) = 0.2 x 0.3 = 0.06
4-31

Introduction To Probability

Uploaded by

Copyright:

Available Formats

Introduction To Probability

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Introduction To Probability

Uploaded by

Copyright:

Available Formats

What are the three approaches to assessing probabilities?

What are the three approaches to assessing probabilities?

What is the Addition Rule?

What is the Addition Rule?

Introduction to Probability

Copyright 2014 Pearson Education, Inc.

Copyright 2014 Pearson Education, Inc.

4.1 The Basics of Probability

Sample Space Examples

Example 2: All 52 cards of a deck of cards:

Copyright 2014 Pearson Education, Inc.

Defining the Sample Space

Step 2: Define the outcomes for one trial of

Step 3: Define the sample space (SS)

Copyright 2014 Pearson Education, Inc.

Step 2: Define the outcomes

Step 3: Define the sample space for three trials

Copyright 2014 Pearson Education, Inc.

Copyright 2014 Pearson Education, Inc.

Step 2: List the outcomes associated with

Copyright 2014 Pearson Education, Inc.

Step 4: Define the event of interest

Copyright 2014 Pearson Education, Inc.

E1 = heads on one flip of fair coin

E1 = rain forecasted on the news

Probability of the second event is affected by the occurrence of

Copyright 2014 Pearson Education, Inc.

P(Ei) = Probability of event Ei occurring

Copyright 2014 Pearson Education, Inc.

Classical Probability Assessment

Copyright 2014 Pearson Education, Inc.

Classical Probability Assessment

Relative Frequency Probability

Ei - The event of interest

Copyright 2014 Pearson Education, Inc.

Relative Frequency Probability

Subjective Probability Assessment

Copyright 2014 Pearson Education, Inc.

4.1 The Rules of Probability

Addition Rule for

Addition Rule for

Addition Rule for

Copyright 2014 Pearson Education, Inc.

Possible Values and Summation

Probability of event occurring

Sum of the probabilities of all

For any event Ei

Copyright 2014 Pearson Education, Inc.

k - Number of outcomes in the

Addition Rule for Individual

The probability of an event Ei is equal to the sum

Copyright 2014 Pearson Education, Inc.

Addition Rule for Individual

Copyright 2014 Pearson Education, Inc.

This rule is corollary to Probability Rules 1 and 2

Copyright 2014 Pearson Education, Inc.

Addition Rule for Any Two Events

P(E1 or E2) = P(E1) + P(E2) - P(E1 and E2)

Copyright 2014 Pearson Education, Inc.