Sree Narayanaguru Institute of

Management Studies

Faculty Name: Dr. G. Bhuvaneswari, Professor

Course Name: Quantitative Methods for Management

Unit 3 : Topic: Probability

Intersection Rule Several Independent events
The probability of the intersection of several independent events is just the
product of the separate probabilities.

P(A B C D) = P(A) x P(B) xP(C) x P(D)

Union Rule Several Independent events
The Law of Total Probability

Or
The Law of Total Probability

Or
Formula
 Problem 1
Three coins are tossed together. Find the probability that
there are exactly 2heads

Solution

Samplespace :HHH,HHT,HTT,HTH,TTT,TTH,THT,THH
The outcomes favourable to obtain exactly 2 heads are
HHT, HTH,THH
Number of favourable outcomes = 3
Total number of outcomes =8
Probability of obtaining exactly 2 heads =3/8 = 0.375.
 Problem 2
The probability that a contractor will get a plumbing contract is 2/3
and the probability that he will not get an electric contract is 5/9. If
the probability of getting at least one contract is 4/5. What is the
probability that he will get both?
Solution
Let A and B denote the event that the contract will get a plumbing
and electric contract respectively.
P(A) =2/3
=5/9
P(B) = 1-(5/9)
=4/9
= 4/5
= 2/3+4/9-4/5
4/5 = 2/3 +4/9 - = 0.31
Probability that the contractor will get both contracts = 0.31
 Problem 3
An inspector of Alaska pipeline has the task of comparing the reliability of
two pumping stations. Each station is liable to two kinds of failure. Pump
failure and leakage. When either (or both) occur, there must be a shut
down. The data at hand indicate that the following probabilities.
Station P(Pump P(Leakage) P(Both)
Failure)
1 0.07 0.10 0
2 0.09 0.12 0.06

Which station has higher probability of being shut down?

Solution
Let A be pump failure
Let B be leakage
Station-1
P(A) =0.07
P(B) =0.10
=0
P(Station 1 shut down) = P( Pump failure or leakage)

= 0.07 + 0.10 -0
= 0.17
Station-2
P(A) =0.09
P(B) =0.12
=0.06
P(Station 2 shut down) = P( Pump failure or leakage)

= 0.09 + 0.12 -0.06 = 0.15

Station 1 has higher probability of being shut down.

 Problem 4
A consulting firm is bidding for two jobs, one with each of two large
multinational corporations. The company executives estimate that the
probability of obtaining the consulting job with firm A, event A, is 0.45.
The executives also feel that if the company should get the job with firm A,
then there is a 0.90 probability that firm B will also give the company the
consulting job. What are the company’s chances of getting both jobs?
Solution

The probability that both A and B will occur

 Problem 5
If the probability that a communication system will have high fidelity is
0.81 and the probability that it will have high fidelity and selectivity is 0.18,
what is the probability that a system with high selectivity will also have
high fidelity?

Solution
Let A be the system has high fidelity
Let B be the system has high selectivity
P(A) =0.81
=0.18

Probability that a system with high selectivity will also have high
fidelity

= 0.18/0.81=0.222
 Problem 6

Solution
Let U as the event that the market will go up and W as the event the
economy will do well
=0.75
=0.30
=0.80
= 1-
= 1-0.80 =0.20
The probability of stock market will go up next year