QS-ConceptofProbability

Quantitative Skills

Concept of Probability

BM015-3-1 Quantitative Skills Slide 2 (of 37)Concept of Probability

Topic & Structure of the lesson

Introduction

Terminologies

Rules of Probability

Tree Diagram

Use of Venn diagram to solve probability

Contingency tables

Posterior Probability

BM015-3-1 Quantitative Skills Slide 3 (of 37)Concept of Probability

Learning Outcomes

At the end of this topic , You should be able toModel /analyse simple business situations using

probability.

BM015-3-1 Quantitative Skills Slide 4 (of 37)Concept of Probability

Key Terms you must be able to use

If you have mastered this topic, you should be able to use the following terms correctly in your assignments and exams:

Addition Rule Mutually Exclusive Not mutually exclusive Multiplication Rule With Replacement Without Replacement Independent events Dependent events Probability tree diagram Conditional Probability

BM015-3-1 Quantitative Skills Slide 5 (of 37)Concept of Probability

Probability is the likelihood or chance of something happening. In an experiment in which all

outcomes are equally likely, the probability of an event E is

n(S)

n(E)

outcomes ofnumber total

outcomes favourable ofnumber )( EP

Introduction

BM015-3-1 Quantitative Skills Slide 6 (of 37)Concept of Probability

(e.g. we might say that there is a 80% chance or 0.8 chance that outcome A will happen; we would then implying that there is a 20% or 0.2 chance that A would not occur.)

In Statistics , probabilities will be more commonly expressed as proportions than as percentages.

BM015-3-1 Quantitative Skills Slide 7 (of 37)Concept of Probability

0 p(E) 1 If P(E) = 0, E is called an impossible

event If P(E) = 1, E is called a certain event. The sum of the probabilities of all the

outcomes of an experiment must total 1.

P(E does not occur) = 1 – P(E) (Complementary probability)

BM015-3-1 Quantitative Skills Slide 8 (of 37)Concept of Probability

Statistical event it is defined as any subset of the given

outcome set that is of interest

Statistical experiment it is described as any situation ,

specially set up or occurring naturally, which can be performed, enacted or otherwise considered in order to gain useful information

Terminologies

BM015-3-1 Quantitative Skills Slide 9 (of 37)Concept of Probability

Sample space

BM015-3-1 Quantitative Skills Slide 10 (of 37)Concept of Probability

Mutually exclusive events Two events of the same experiment

are said to be mutually exclusive if their respective events do not overlap.

BM015-3-1 Quantitative Skills Slide 11 (of 37)Concept of Probability

Not mutually exclusive If two or more events occur at one time.

Independent events Two events are said to be independent if

the occurrence (or not) of one of the events will in no way affect the occurrence (or not) of other.

Alternatively, two events that are defined on two physically different experiments are said to be independent.

BM015-3-1 Quantitative Skills Slide 12 (of 37)Concept of Probability

BM015-3-1 Quantitative Skills Slide 13 (of 37)Concept of Probability

Conditional event one of the outcomes of which is

influenced by the outcomes of another event.

BM015-3-1 Quantitative Skills Slide 14 (of 37)Concept of Probability

Complement Rule

BM015-3-1 Quantitative Skills Slide 15 (of 37)Concept of Probability

Quick Review Question

BM015-3-1 Quantitative Skills Slide 16 (of 37)Concept of Probability

Addition Rule Multiplication Rule

Rules of Probability

BM015-3-1 Quantitative Skills Slide 17 (of 37)Concept of Probability

Rule of Addition

(i.e.the probability that either E1 or E2 occurs is the probability that E1 occurs, plus the probability that E2 occurs)

BM015-3-1 Quantitative Skills Slide 18 (of 37)Concept of Probability

General Addition Principle If E and F are not mutually exclusive events, then

P(E1E2) = P(E1) + P(E2)-P(E1E2)

BM015-3-1 Quantitative Skills Slide 19 (of 37)Concept of Probability

Quick Review Question

Example

If a card is drawn from a deck of playing cards, what is he probability of getting a red or an ace?

BM015-3-1 Quantitative Skills Slide 20 (of 37)Concept of Probability

Rule of multiplication If A and B are two events, then the probability of

P(A and B), i.e. probability that A and B occur can be calculated as below: Probabilities under conditions of statistical independence P(A and B) = P(A) x P(B) Probabilities under conditions of statistical dependence

P(A and B) = P(A) x P(B\A) Probability of event B given that A has occurred

P(B\A) =

P(A)

B) andP(A

BM015-3-1 Quantitative Skills Slide 21 (of 37)Concept of Probability

Quick Review Question

BM015-3-1 Quantitative Skills Slide 22 (of 37)Concept of Probability

The probability of event A occurring conditional on B having occurred.

It can be written in the form Pr(A/B)

Pr(A/B) =

Conditional Probability

P(B)

B) andP(A

BM015-3-1 Quantitative Skills Slide 23 (of 37)Concept of Probability

Quick Review Question

Example:

Of the cars on a used car lot, 70% have air conditioning (AC) and 40% have a CD player (CD), 20% of the cars have both. What is the probability that a car has a CD player, given that it has AC ?

BM015-3-1 Quantitative Skills Slide 24 (of 37)Concept of Probability

BM015-3-1 Quantitative Skills Slide 25 (of 37)Concept of Probability

BM015-3-1 Quantitative Skills Slide 26 (of 37)Concept of Probability

Tree diagram It augments the fundamental principle of counting by

exhibiting all possible outcomes of a sequence of events where each event can occur in a finite number of ways.

Tree Diagrams

BM015-3-1 Quantitative Skills Slide 27 (of 37)Concept of Probability

?

Quick Review Question

BM015-3-1 Quantitative Skills Slide 28 (of 37)Concept of Probability

When events are not mutually exclusive, Venn diagram is useful. Note that when completing a Venn diagram , it is essential to deal

with the overlap area first.

Venn diagram

BM015-3-1 Quantitative Skills Slide 29 (of 37)Concept of Probability

Quick Review Question

BM015-3-1 Quantitative Skills Slide 30 (of 37)Concept of Probability

A table used to classify sample observations according to two or more identifiable characteristics

It is a cross tabulation that simultaneously summarizes two variables of interest and their relationship.

Example: A survey of 150 adults classified each as to gender and the number of movies attended last month. Each respondent is classified according to two criteria –the number of movies attended and gender.

Contingency Tables

Gender

Movies Attended Men Women Total

0 20 40 60

1 40 30 70

2 or more 10 10 20

Total 70 80 150

BM015-3-1 Quantitative Skills Slide 31 (of 37)Concept of Probability

Example:

Quick Review Question

BM015-3-1 Quantitative Skills Slide 32 (of 37)Concept of Probability

Bayes Theorem It is a formula which can be thought of as ‘reversing’

conditional probability. That is , it finds a conditional probability (A\B) given, among other things, its inverse (B\A).

If A and B are two events of an experiment, then

P(A\B) =

P(B)

A)\P(B x P(A)

Posterior Probability

BM015-3-1 Quantitative Skills Slide 33 (of 37)Concept of Probability

Quick Review Question

BM015-3-1 Quantitative Skills Slide 34 (of 37)Concept of Probability

Follow Up Assignment

Tutorial Questions

BM015-3-1 Quantitative Skills Slide 35 (of 37)Concept of Probability

Summary of Main Teaching Points

What is Probability ? Rules of Probability Using

Tree Diagram Venn Diagram Contingency table

to solve the questions on Probability Conditional Probability & Posterior Probability

Recall

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Q & A

Question and Answer Session

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

16 cards, each written with a letter from the set B, E, R, T, A, N, G, G, U, N, G, J, A, W, A and B are put into a box. A card is selected from the box randomly. What is the probability that the chosen card has the letter

(a) B?

(b) A ?

(c) T ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

A ball is chosen randomly from a bag containing 10 red balls, 7 black balls, 4 yellow balls and 5 green balls. Find the probability that the ball chosen

• Is black in colour,

• Neither green nor yellow,

• Not yellow.

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

In a class of 40 students, 5 out of the 15 girls and 7 out of the 25 boys are members of the Mathematics society. A student is selected randomly. What is the probability that the student is either a girl or a member of the Mathematics Society ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

A bag contains 4 red marbles, 2 white marbles and 8 black marbles. What is the probability that a marble picked from the bag in random is either red or white ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

Alwi and Borhan are shooting at a target. The probability that Alwi’s shot hits the target is ½ and the probability that Borhan’s shot hits the target is 1/3. Alwi shoots first, then followed by Borhan. What is the probability that

(a) Both their shots hit the target?

(b) Only one of their shots hits the target?

(c) Noe of their shots hits the target ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

Based on the records, 20% of pots supplied by Factory A have cracks, while 10% of pots supplied by factory B have cracks. Our company purchases pots from A and B in the ratio 3:7, what is the probability that a pot randomly selected has cracks ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

Jing Hong goes to school in the morning by taking either bus A or bus B. The probability he takes bus A is 1/3. The probability that he is late when taking bus A is 1/5 and the probability that he is late when taking bus B is 1/6.

(a) What is the probability that Jing Hong is late on Monday ?

(b) Given that he is late, what is the probability that he has taken bus B ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

40% of Malaysian adult males smoke cigarettes. Among those who smoke, there is a 0.3 probability that they will have lung cancer. Among the non-smokers, there is also a 0.1 probability that they will have the disease.

(a) What is the probability that a Malaysian male adult suffer from lung cancer ?

(b) What is the probability that a Malaysian male adult who is suffering from lung cancer is a smoker ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

In a group of 100 people, 40 of them own cars, 25 own motorcycles and 15 have both. A person is picked from that group randomly. What is the probability hat the person

(a) Owns either a car or a motorcycle ?

(b) Owns either a car or motorcycle but not both ?

(c) Owns a motorcycle if he owns a car ?

(d) Does not own a car, given that he has a motorcycle ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

The table below shows the number of students sitting for each of the subjects in Level exam. The total number of candidates is 58.

Mathematics 30Economics 48History 34Mathematics and Economics 23Economics and History 30Mathematics and History 13

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

(a) Find the probability that a randomly selected candidate takes

(i) Only Mathematics

(ii) Mathematics and Economics but not History

(iii)All three subjects

(b) What is the probability that a candidate takes History but not Economics, if he takes Mathematics ?

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

A senior North Carolina senator knows he will soon vote on a controversial bill. To learn his constituents’ attitudes about the bill, he met with groups in three cities in his state. An aide jotted down the opinions of 15 attendees at each meeting.

BM015-3-1 Quantitative Skills Slide 36 (of 37)Concept of Probability

Question and Answer Session

(a) What is the probability that someone from Chapel Hill is neutral about the bill ? Strongly opposed ?

(b) What is the probability that someone in the three city groups strongly supports the bill ?

(c) What is the probability that someone from the Raleigh or Lumberton groups is neutral or

slightly opposed ?

BM015-3-1 Quantitative Skills Slide 37 (of 37)Concept of Probability

Probability Distribution

Next Session