You are on page 1of 17

# ¬    



  .

    .

  .

.

 .

    .

.

  .

.

¬ .

.

   ! "#  .

 .

 .

.

 .

 ¬ .

Ô \$%& |&'  .

.

-.(¬ .

.

.

(.

() .

% .

*  £ Examine the use of probability theory in decision making £ Recognise the approaches to probability £ Apply the rules of probability for calculating different kinds of probabilities £ Apply the Baye's probability theorem by taking new information into account £ Apply the concept of random variables to real life situations a ¬+&. % \$%& |&'  .

.

(¬ .-.

.

 (%.

 ( · .

.

 · / .

((¬ .

·  ( (!()) 0 (.

() .

 · + (() .

· .

() .

· *()   ( (() .

·  1 () .

· /  ( .

2 ( (!(.

() .

· .

.

(.

(+(*  ·   · 0 3(4 (   · .

*.

(   ¬+&. % \$%& |&'  .

.

(¬ .-.

.

.

 Every human activity has an element of uncertainty. % \$%& |&'  . you very often use the word µprobably¶.  ¬+&. The theory of probability helps us to make wiser decisions by reducing the degree of uncertainty. Mathematicians and statisticians developed a separate field of mathematics and named it as µProbability Theory¶. Therefore. probably it may rain today. there is a need to handle uncertainty systematically and scientifically. probably the share price may go up in the next week. Uncertainty affects the decision making process. like. In your daily lives.

.

-.(¬ .

. In other words. % \$%& |&'  . P(A)=m/n where. £ It is the ratio between the favorable outcomes to an event ³A´ (m) to the total outcomes of the experiment (n). µm¶ is the number of favourable outcomes of an event µA¶ and µn¶ is the total number of ë outcomes of the experiment. /&5   %(%5(¬+%  4 £Probability is a numerical measure which indicates the chance of occurrence of an event ³A´..  ¬+&. It is denoted by P(A).com/my_weblog/2008/12/pro. herdingcats.typepad.

.

-.(¬ .

 ( ((¬ .

> ¬+&. it is not an experiment. % \$%& |&'  . then it is called random experiment or stochastic experiment · dample dpace: dample dpace or total number of outcomes of an experiment is the set of all possible outcomes of a random experiment and is denoted by µd¶. Event is a subset of sample space. ·If a coin stands on its edge. l Random Experiment: When the outcome of an experiment cannot be predicted. · Event: Events may be a single outcome or combination of outcomes. ·Experiment: An operation that results in a definite outcome is called an experiment.

.

(¬ .-.

 ( ((¬ .

· Complementation of an Event: The complement of an event is given by P(Á)= 1-P(A) · Independent Event: Two events are said to be independent of each other if the occurrence of one is not affected by the occurrence of other or does not affect the occurrence of the other. % \$%& |&'  . · Mutually Exclusive Events: Two or more events are said to be mutually exclusive if the occurrence of one prevents the occurrence of other events. ] ¬+&. · Exhaustive det of Events: A set of events is exhaustive if one or other of the events in the set occurs whenever the experiment is conducted. · Equally likely Events (Equi-probable events): Two or more events are said to be equally likely if they have equal chance of occurrence.

.

(¬ .-.

)) 0 (.

(¬ .

/what-is- · dubjective Approach: Under this approach the investigator probability.com/. Getting a head in tossing a coin. % \$%& |&'  .life123. · dtatistical/ Relative frequency/ Empirical/ Posteriori Approach:Under this approach the probability of an event is arrived at after conducting an experiment www.  ¬+&..shtml or researcher assigns probability to the events either from his experience or from past records. · Axiomatic Approach: This approach is based on set theory.. ·Classical/ Mathematical/ Priori Approach: Under this approach the probability of an event is known before conducting the experiment.

.

(¬ .-.

+ ((¬ .

dometimes. B and C are any three events then P(AuBuC)= P(A)+P(B)+P(c)-P(AƴB)-P(BƴC)-P(CƴA)+P(AƴƴBC) £ Multiplication Rule: Multiplication Rule is given when A & B are two independent events then P(AƴB)=p(A)P(B) ½ ¬+&. % \$%& |&'  . ·Managers very often come across with situations where they have to take decisions about implementing either course of action A or course of action B or course of action C. they have to take decisions regarding the implementation of both A and B. £Addition Rule: The addition rule of probability has provided with 3 different steps: i) If µA¶ and µB¶ are any two events then P(AuB)= P(A)+P(B)-P(AƴB) ii) If µA¶ and µB¶ are two mutually exclusive events then P(AuB)= P(A) + P(B) iii) If A.

.

(¬ .-.

.

(¬ .

% \$%& |&'  . dometimes we wish to know the probability that the price of a particular petroleum product will rise.. duch probabilities are known as conditional probabilities.P(A/B) It follows that P(A/B)=P(AëB)/P(B) P(B/A)=P(AëB)/P(A) www.. given that the finance minister has increased the petrol price.shodor.org/.P(B/A) =P(B). If A and B are dependent events then the probability of occurrence of A and B is given by P(AëB)=P(A)./discussions/ConditionalPro â Ô ¬+&.

.

(¬ .-.

*(¬  ((¬ .

to apply proper multiplication rules £ To find total outcome of the experiment use 2n or 6n in the case of coin or die respectively. % \$%& |&'  . check whether the events are independent or dependent. ÔÔ ¬+&. to apply addition rule £ If words µboth or and¶ are used.or¶ is used. where µn¶ is the number of coins or dice thrown at a time or a coin or die thrown µn¶ times. check whether the events are mutually exclusive or not. In all other cases use nCr. ·Xollowing are the steps which need to follow while solving problems on Probability: £Define the events £ Xind total outcome of the experiment £Xind probability of each event £If words µeither .

.

(¬ .-.

 1 (¬ .

An are µn¶ mutually exclusive and exhaustive events and B is a common event to all theorems then probability of occurrence of A1 given that B has already occurred is given by   Ô ë    â Ô   Ô â  ! ? §   !Ô ë   â  Ôa ¬+&. % \$%& |&'  . A2.««. Baye¶s Theorem states that if A1.

.

-.(¬ .

 1 (!( . /  (.

(¬ .

given the getting a sample value given sample value the population value £Possible to incorporate latest £Not possible to incorporate information latest information £Possible to incorporate cost £ Not possible aspects Ô  | . Baye¶s Probabilities Conditional Probabilities £Xinds the probability of £Xinds the probability of population value.

.

-.(¬ .

  ( If we can assign a real-valued function to every value of the variable in the sample space. Ô | . P(Xi)=P[X=Xi] for all I ii. £ If Xi is a continuous random variable then P(X) is known as probability density function of X and is denoted by f(X). P(Xi)  0 for all I iii. duch that i. ƶP(Xi) = 1 then it is called Random Variable £ If Xi is a discrete random variable then P(X) is known as probability mass function of X. +(.

.

-.(¬ .

It can be discrete or continuous. £ Random variable is a not a variable. £ When multiple events are involved in an experiment.   £ Probability plays an important role in decision making process. % \$%& |&'  . the concerned probabilities are calculated using addition and multiplication rules of probability. £ Bayeµs theorem deals with the probability of the occurrence of an event to the occurrence or non-occurrence of an associated event. Ô ¬+&. This is an important theorem helpful for managers in business decisions. It is a function.

.

(¬ .-.

Define classical approach with one example? Ans: Classical approach the probability of an event is known before conducting the experiment. if both A & B are two mutually exclusive events? Ans: P(AUB)= P(A)+P(B). 0 3(4 (   1. 4.What is probability distribution of a random variable? Ans: Probability of the number of heads forms a probability distribution. % \$%& |&'  . Drawing a king from well shuffled pack is one of its example. Ô> ¬+&. In a pack of cards how many king cards are available Ans: 4 3. Which Addition Rule we use. A systematic representation of random variable with its value and probabilities is called a probability distribution of that random variable. 2.

.

(¬ .-.

.

*.

Ô] ¬+&. Take a pack of cards & try to analyze how many kings. 1. And also analyze how many: £ A¶s £ Heart shape cards £ dpades £ Cloves £ Diamond shape cards are present. % \$%& | . Queens & Jacks are present.