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Objective:
Appreciate the relevance of probability theory in
decision-making.
Understand the different approaches to probability
Calculate probabilities in different situation
Revise probability estimate, if added information is
available.
Introduction:
2. An experiment:
The activity that produces such an event is an
experiment.
3. Sample Space:
The set of all possible outcomes of an experiment
is called the same space for the experiment.
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Probability is:
Types of probability
Classical Relative Frequency Subjective
Approach Approach Approach
3. Subjective Probability
based on personal beliefs, experiences,
prejudices, intuition - personal judgment
different for all observers (subjective)
examples: Super Bowl, elections, new product
introduction, and snowfall
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Prob-4-14 Pg 169.
Let P(50-74%) = P,
Then P(75-99%) = 1/2*P = 0.50P
P(25-49%) = 2/5*P = 0.40P
P(00-24%) = 0.00
P(100%) = 1/20 = 0.05
Thus 0+0.40P+P+0.50P+0.05P+0.05 = 1
1.9P = 0.95
P = 0.50
Probability Rules:
P(A): The probability of event A happening
P(A or B): The probability of either A or B happening.
P(A) + P(not A) = 1
Prob-4-22 Pg 176.
D= Disk drive failure K= key board failure
a) P(D or K) = P(D) + P(K) –P(DK)
0.20 = P(D) + 3P(D) –0.05
0.15 = 4P(D)
P(D) = 0.0625
b)P(K) = 2P(D) = 0.125
Thus P(D or K) = P(D) +P(K) – 0.05
= 0.0625 + 0.1250-0.05
= 0.1825
This means that the computer is 86.25% resistant to
dist-drive and /or key board failure.
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Probabilities under conditions of
STATISTICAL INDEPENDENCE
P(B/A) = P(B)
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Prob: 4.31 Pg 184
P(A) + P(not A) = 1
a) P(1,2,3,4) = 0.75*0.82*0.87*0.90 =
0.481545
= 0.01360
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Probabilities under conditions of
STATISTICAL DEPENDENCE
P(BA
P(B|A) = )
P(A)
Note:
Conditional Probability: given that….
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Joint probability: both …… and
Type of Statistical
Probabilit Symbol Independen Statistical Dependent
y t
Sum of the probabilities of
Marginal P(A) P(A) the joint events in which A
occurs.
P(AB) or P(A)*P(B) P(A|B)*P(B)
Joint
P(BA) P(B)*P(A) P(B|A)*P(A)
P(B) P(BA)/P(A)
Conditional P(B/A)
P(A) P(AB)/P(B)
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P(C) = P(C|R, not I)*P(R, not I) + P(C| not R,I)*P(not
R,I)
P(C|R,I)*P(R,I) + P(C|not R,not I)*P(not R,not
I)
= 0.67*0.80(1-a) + 0.72*0.20*a + 0.58*0.80*a
+
0.85*0.20*(1-a)
= 0.706 – 0.098a
P(C) ≥ 0.65 0.706 – 0.098*a ≥ 0.65
0.571 ≥ a.
b) P(I) = 0.70 Let P(R) = b
As in part (a) :
P(C) = 0.67*b*0.30 +0.72*(1-b)*0.70 + 0.58*b*0.70
+
0.85(1-b)*0.30
= 0.759 – 0.152b
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Revising Prior estimates of Probabilities:
Bayes’ Theorem
e.g.
In a bolt factory machines A, B and C manufacture
respectively 25%, 35% and 40 % of the total output. Of
the total of their output 5, 4 and 2 percent are
defective bolts, A bolt is drawn at random and is found
to be defective. What the probability that it was
manufactured by machines A, B, or C?
Ans.
Let event Ai (i=1,2,3) be the event of drawing a bolt
produced by machine A, B and C, respectively.
Prior Condition
Joint
Probabilit al Posterior
Event Probabilit
y Probabilit Probability
y (2) * (3)
P(Ai) y P(B/Ai)
0.0125/0.03
A1 0.25 0.05 0.0125 45
= 0.362
0.0140/0.03
A2 0.35 0.04 0.0140 45
=0.406
0.0080/0.03
A3 0.40 0.02 0.0080 45
=0.232
Total 1.000 0.0345 1.000
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The above table shows the probability that the
item was defective and produced by machine A
is 0.362, by machine B is 0.406 and machine C is
0.232.
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