MANSCI: MANAGEMENT SCIENCE

CHAPTER 3: Statistically Independent and Statistically Dependent Events

PROF. MARIA LIBERTY ISIP – DHVSU COLLEGE OF BUSINESS STUDIES
BS ACCOUNTANCY | 1ST SEMESTER A.Y. 2022-2023

STATISTICALLY INDEPENDENT EVENTS Since events are independent the occurrence of one in no way
Events may be either dependent or independent. affects the outcome of another, thus:
When they are independent, the occurrence of one event has P(A\B) = P(A) and P(B\A) = P(B)
no effect on the probability of occurrence of the second event.
Let us examine four (4) sets of events and determine Example of Probabilities when Events are Independent;
which are independent: A bucket contains 3 black balls and 7 green balls. We
(a) your education
(b) your income levels
} Dependent Events draw a ball from the bucket, replace it and draw a second ball.

(a)
(b)
draw a jack of hearts from a deck of cards
draw a jack of clubs from a deck of cards
} Independent Events BUCKET
NUMBER OF
PROBABILITY
BALLS
(a)
(b)
Los Angeles Lakers wins the Western Conference
Los Angeles Lakers wins the NBA Finals
} Dependent Events Black Balls
Green Balls
3
7
3/10 or 0.30 or 30%
7/10 or 0.70 or 70%
TOTAL 10 10/10 or 1.00 or 100%
(a)
(b)
Snow in Antarctica
Rain in the Philippines
} Independent Events
We can determine the probability of each of the following events
3 TYPES OF PROBABILITY UNDER BOTH STATISTICAL occurring:
INDEPENDENCE AND STATISTICAL DEPENDENCE 1. A black ball is drawn on the first draw:
P(B) = .30 = 30% (marginal probability)
MARGINAL (or Simple) PROBABILITY – just the probability
of an event occurring. 2. Two green balls are drawn:
P(GG) = P(G) x P(G) = .7 x .7 = .49 = 49%
Equation: P(A) (probability for 2 independent events)

Example: P (die is a 2) = 1/6 = .166 = 17%
Because each toss is an independent event (that is, what we get
on the first toss has absolutely no effect on any later toss) the
marginal probability for each possible outcome is 1/6.
3. A black ball is drawn on the second draw if the
first draw is green:
P(B\G) = P(B) = .30 = 30% (This is a conditional
probability but equal to the marginal probability
because the 2 draws are independent events.)

JOINT PROBABILITY – the product of marginal probabilities. 4. A green ball is drawn on the 2nd draw if the first
The joint probability of 2 or more independent events occurring draw was green.
is a product of their marginal or simple probabilities. P(G\G) = P(G) = .70 = 70% (This is a conditional
probability as in event 3)
Equation: P(AB) = P(A) x P(B)
SUMMARY OF EQUATIONS:
Where: P(AB) – joint probability of events A and B occurring
together, or one after the other. • P(A) = Marginal Probability

P(A) - marginal probability of A • P(AB) = P(A) x P(B) = Joint Probability of events A and
B occurring together
P(B) - marginal probability of B
• P(B\A) = P(B) = Probability of B, given A has occurred
Example: The probability of tossing 6 on the first roll of a die
and a 2 on the second roll is: • P(A\B) = P(A) = Probability of A, given B has occurred.
P (6 on the first and 2 on the second)
= P (tossing a six) x P (tossing a 2) STATISTICALLY DEPENDENT EVENTS
= 1/6 x 1/6 = 1/36 ■ When events are statistically dependent, the
= 0.028 or 3% occurrence of one event affects the probability of
occurrence of some other event.
CONDITIONAL PROBABILITY - the probability of an event ■ Marginal, Conditional and Joint Probabilities exist
occurring given that another event has taken place. under dependence as they did under independence,
but the form of conditional and joint probability are
Expressed as P(B\A) or the probability of event B, given event changed.
A has occurred. ■ A marginal probability is computed as it was for
independent events. Again, the marginal probability of
Similarly, P(A\B) would mean “the conditional probability of the event A occurring is denoted by P(A).
event A, given that event B has taken place.”

Notes by: NALA, MARY JOY C. “Mind over matter.”

 MANSCI: MANAGEMENT SCIENCE
CHAPTER 3: Statistically Independent and Statistically Dependent Events
PROF. MARIA LIBERTY ISIP – DHVSU COLLEGE OF BUSINESS STUDIES
BS ACCOUNTANCY | 1ST SEMESTER A.Y. 2022-2023

For Joint Probability under Dependence: Series of possible probabilities:

P(AB) = P(A\B) x P(B) P(W) = 6/10 P(WL) = 4/10
P(Y) = 4/10 P(WN) = 2/10
For Conditional Probability under Dependence: P(YL) = 3/10 P(YN) = 1/10
P(A\B) = P(AB) P(L) = 7/10 P(N) = 3/10
P(B)
Find: P (L\Y) = P (YL)
PROBLEM 1: Joint probabilities when events are P (Y)
dependent. = 3/10
4/10
Your stockbroker informs you that if the stock market = 0.75 or 75 %
reaches the 12,500-point level by January, there is a 70%
probability that Tubeless Electronics will go up in value. Your
own feeling is that there is only a 40% chance of the market
average reaching 12,500 points by January. Can you calculate
the probability that both the stock market will reach 12,500 level
and the price of Tubeless Electronics will go up?

Let: T – Tubeless Electronics price to go up in value

S – the stock market reaching 12,500-point level
P(T\S) = Probability the Tubeless Electronics will go up in
value if the stock market reaches the 12,500-pt. level by
January = 70%
P(S) = Probability of the market reaching 12,500 points by
January = 40%
Find: P (S and T) = P(T\S) x P(S)
= 70% x 40%
= 28%

PROBLEM 2: JOINT PROBABILITY UNDER STATISTICAL

DEPENDENCE

Your professor tells you that if you score an 85 or better

on your midterm exams, then you have a 90% chance of getting
an A for the course. You think you have only 50% chance of
scoring 85 or better. Find the probability that both your score is
85 or better and you receive an A in the course.

Let: P (A\85 or better) = Probability of getting an A in

the course if you score 85 or better = 90%
P (85 or better) = Probability of scoring 85 or better
= 50%
Find: P (85 or better and getting an A)
= P (A\85 or better) x P (85 or better)
= 90% x 50%
= 45%

PROBLEM 3: CONDITIONAL PROBABILITY

Assume that we have an urn containing 10 balls of the following
descriptions:
4 are white (W) and lettered (L)
2 are white (W) and numbered (N)
3 are yellow (Y) and lettered (L)
1 is yellow (Y) and numbered (N)

You randomly draw a ball from the urn and see that it is yellow.
What, then, is the probability that the ball is lettered?

Notes by: NALA, MARY JOY C. “Mind over matter.”