Week 6 Lecture Slides

Probability 2
Introduction to..
Quantitative Methods for Business
UGB108
Lecture 6
Lecture Six UGB108 – Neal Lennox

Probability
Compound Events And The Multiplication
Rule:
As a recap, recall that any event which is
made up of other events, is known as a
compound event.

Probability
Rule:
Recall that the special rule of addition can only
be applied if the events are mutually exclusive
and, mutually exclusive means that the
occurrence of one event excludes the
possibility of another event occurring at the
same time.
Probability
Rule:
e.g. the top face of a die depicting a ‘3’,
excludes all the other values. Note that when
a ‘3’ occurs, the probability of the occurrence
of 1, 2, 4, 5 or 6 is unchanged.

Probability
Rule:
If the occurrence of one event does not alter
the probability of the occurrence of another
event, we say that the events are independent
of each other.

Probability
Rule:
For two independent events A and B, the
probability that they will both occur is found
by multiplying the two probabilities.

Probability
Rule:
For two independent events A and B, the
probability that they will both occur is found
by multiplying the two probabilities.
This is known as the
special rule of multiplication.

Probability
Rule:
As an example, assume we throw a die twice.
What is the probability of a ‘5’ and a ‘6’
occurring? i.e.

Probability
Rule:
occurring? i.e.
P(56) = P(5) * P(6) = 1/6 * 1/6 = 1/36

Probability
Rule:
occurring? i.e.
P(56) = P(5) * P(6) = 1/6 * 1/6 = 1/36
i.e. a ‘5’ with the first throw and a ‘6’ with the
second throw
Probability
Rule:
Returning to our student problem:

Probability
Rule:
Returning to our student problem:
Mw Mw Mb Mb
F Fw Fw Fb M
W B
Probability
Rule:
In our student example, the probability of
selecting two students (e.g. a male student
then a female student) is found by the product
of their individual probabilities. i.e.

Probability
Rule:
In our student example, the probability of
selecting two students (e.g. a male student
then a female student) is found by the product
of their individual probabilities. i.e.
P(MF) = P(M) * P(F) = 4/7 * 3/7 = 12/49

Probability
Rule:
and similarly ..

Probability
Rule:
and similarly ..
P(MM) = P(M) * P(M) = 4/7 * 4/7 = 16/49

Probability
Rule:
and similarly ..
P(MM) = P(M) * P(M) = 4/7 * 4/7 = 16/49
and
P(FF) = P(F) * P(F) = 3/7 * 3/7 = 9/49

Probability
Rule:
If two events A and B are not independent,
then they are said to be dependent. To
calculate probabilities when events are
dependent, we must use the
general rule of multiplication

Probability
Rule:
To illustrate dependency, suppose we select a
male student, then what is the probability that
he will be badly prepared?

Probability
Rule:
To illustrate dependency, suppose we select a
male student, then what is the probability that
he will be badly prepared?
How would this compare with the probability
of selecting a female student and finding her
to be badly prepared?
Probability
Rule:
In fact, does it make any difference to the
probability of selecting a badly prepared
student, which gender we choose ?

Probability
Rule:
If it does make a difference, then we say that
the two events (gender and degree of
preparation), are dependent events and one
event is conditional upon the other.

Probability
Rule:
If it does make a difference, then we say that
the two events (gender and degree of
preparation), are dependent events and one
event is conditional upon the other.
i.e. in this case, the degree of preparation is
conditional upon the gender of the student
Probability
Rule:
Let us consider this problem in detail ..
What is the probability of getting a badly
prepared student (event b), GIVEN THAT we
select a male student (event M) ?

Probability
Rule:
We can denote this question as P(b|M) and
means the probability of a badly prepared
student (b), given a male student (M).

Probability
Rule:
Since we are 'given' M, i.e. we have selected a
male student, then we need only consider
those sample points in event M i.e.

Probability
Rule:
Since we are 'given' M, i.e. we have selected a
male student, then we need only consider
those sample points in event M i.e.
M = {Mw, Mw, Mb, Mb,}

Probability
Rule:
Selection of any one of these events at
random, suggests P(Mb) = 2/4 = P(Mw) = 0.5.

Probability
Rule:
Selection of any one of these events at
random, suggests P(Mb) = 2/4 = P(Mw) = 0.5.
Therefore, P(b|M) = 0.5

Probability
Rule:
Examination of the seven students suggests
three students were badly prepared.

Probability
Rule:
i.e. P(b) = 3/7 = 0.428

Probability
Rule:
i.e. P(b) = 3/7 = 0.428
Thus in this case, P(b|M) is NOT the same
as P(b)
Probability
Rule:
The interpretation of P(b|M)  P(b) is that is
does matter what the student's gender is,
when we consider the likelihood of selecting a
badly prepared one.

Probability
Rule:
Note .. if P(b|M) = P(b), then the events
will be INDEPENDENT and b will NOT be
conditional upon M.

Probability
Rule:
The general rule of multiplication to
determine the conditional probability of two
events A and B is given by ..
P(A|B) = P(AB)/P(B) and similarly ..
P(B|A) = P(AB)/P(A)
Probability
Rule:
Note, if P(A|B) = P(A), then the events A and B
are independent.

Probability
Rule:
Let us apply the general rule of multiplication
to the probability of selecting a badly
prepared student (b), given a male student (M).
i.e. P(b|M) = P(bM)/P(M).

Probability
Rule:
We know P(M) = 4/7 and we can determine
P(bM) as 2/7. Hence, P(b|M) = (2/7)/(4/7)
or (2/7)*(7/4) = 0.5.

Probability
Rule:
We know P(M) = 4/7 and we can determine
P(bM) as 2/7. Hence, P(b|M) = (2/7)/(4/7)
or (2/7)*(7/4) = 0.5.
i.e. the probability of selecting a badly
prepared student, given that the student is
male, is 0.5
Probability
Rule:
As the addition rule allows us to calculate the
probability of the union of events, the
multiplication rule allows us to calculate the
probability of the intersection of events.

Probability
Rule:
Consider the conditional probability of two
events A and B .. P(A|B) = P(AB)/P(B)

Probability
Rule:
If we multiply both sides of the equation by
P(B), we get .. P(A|B) * P(B) = P(AB)

Probability
Rule:
P(B), we get .. P(A|B) * P(B) = P(AB)
and re-arranging .. P(AB) = P(A|B) * P(B)
Probability
Rule:
and reads the probability of both A and B
occurring, is given by the product of the
probability of A occurring separately and
the conditional probability of B occurring,
given that A has already occurred.

Probability
Rule:
Similarly .. P(B|A) = P(AB)/P(A)
P(A), we get .. P(AB) = P(B|A) * P(A)

Probability
Rule:
Similarly .. P(B|A) = P(AB)/P(A)
P(A), we get .. P(AB) = P(B|A) * P(A)
Let us look at an example of conditional
probability and the multiplication rule ..
Probability
Rule:
Suppose past experience (relative frequency)
suggests that 82 % of households own a video
recorder, given that they own a car and, 54 %
of households own a car.

Probability
Rule:
Armed with this information, we need to know
the probability of selecting a house at random,
which owns both a car and a video recorder.

Probability
Rule:
Solution .. Let C (V) be the event of owning a
car (video recorder).

Probability
Rule:
Then P(CV) is the probability of a household
owning a car and a video recorder.

Probability
Rule:
Then P(CV) is the probability of a household
owning a car and a video recorder.
We know P(V|C) = 0.82 and P(C) = 0.54, then
Probability
Rule:
P(CV) = P(V|C) * P(C) and
P(CV) = 0.82 * 0.54 = 0.443

Probability
Rule:
We have previously discussed the situation
when P(A|B) = P(A). We said that when P(A|
B) = P(A), then the events A and B are said to
be independent.

Probability
Rule:
In this case, we can rewrite
P(AB) = P(A|B) * P(B) as ..
P(AB) = P(A) * P(B)

Probability
Rule:
In this case, we can rewrite
P(AB) = P(A|B) * P(B) as ..
P(AB) = P(A) * P(B)
This rule can be extended to include additional
independent events.

Probability
Rule:
Example - assume the manager of a fast food
restaurant knows that 65 % of his customers
take their food away. What would be the
probability of any two successive customers
both taking their food away? Assume the
decisions of customers are unrelated.
Probability
Rule:
Solution .. Let T be the event of taking food
away.
Then P(T1T2) = P(T1) * P(T2) = 0.65 * 0.65
= 0.422

Probability
Rule:
Solution .. Let T be the event of taking food
away.
Then P(T1T2) = P(T1) * P(T2) = 0.65 * 0.65
= 0.422
i.e. 42.2 % of successive pairs of customers
will take their food away.
Probability
Rule:
Contingency table:
B
P(B) P(B )
P ( A) P( A  B) P( A  B)
P ( A) P( A  B) P( A  B)

Probability
Rule:
Contingency table:
B
P(B) P(B )
P ( A) P( A  B) P( A  B)
P ( A) P( A  B) P( A  B)
P( A | B)  P( A  B) P( B)

Week 6 Lecture Slides

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

Week 6 Lecture Slides

Uploaded by

Copyright:

Available Formats

Probability 2

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

Lecture Six UGB108 – Neal Lennox

You might also like