Professional Documents
Culture Documents
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 1
Chapter 4
Basic Probability
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 2
Learning Objectives
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 3
Sportsware Brands
Annabel Gonzalez, chief retail analyst at marketing
firm Longmeadow Consultants is tracking the sales
of compression-gear produced by Under Armour,
Inc., Nike, Inc., and Adidas Group.
After collecting data from 600 recent purchases,
Annabel wants to determine weather age influences
brand choice.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 4
Basic Probability Concepts
Probability A probability is a numerical value that
measures the likelihood that an uncertain event occurs.
The value of a probability is between zero (0) and one
(1).
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 5
Basic Probability Concepts
Assessing Probability
There are three approaches to assessing the probability
of an uncertain event. Many people mix them up or use
them interchangeably. Each approach will be considered
separately.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 6
Assessing Probability
3. subjective probability
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 7
A priori probability or Classical Approach
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 8
Example of a priori probability or
Classical Approach
For example, the two-dice experiment has 36 equally
likely simple events. The P(that the sum of the dots on
the two faces equals 7) is
The probability is
obtained a priori using
the classical approach
as shown in this Venn
diagram for 2 dice:
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 9
Another Example of a priori
probability
X 31 days in January 31
T 365 days in 2013 365
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 10
Example of an empirical probability
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 11
An Empirical probability
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 12
An Empirical probability
Law of Large Numbers Results of 10, 20, 50 and 200 coin flips
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 13
Subjective probability
A subjective probability reflects someones informed
judgment about the likelihood of an event or persons
experiences, opinions, and analysis of a particular
situation.
Used when there is no repeatable random experiment.
Subjective probability may differ from person to person
A media development team assigns a 60%
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 14
Fundamental Probability Concepts
An experiment is a trial that results in one of several
uncertain outcomes. OR A random experiment is an
observational process whose results cannot be known in
advance.
Example: Trying to assess the probability of a
snowboarder winning a medal in the ladies half-pipe event
while competing in the Winter Olympic Games.
Solution: The athletes attempt to predict her chances of
S A, B,C, D, F
An event is a subset
of the sample space.
A, B,C, D F
The event passing grades The simple event failing
is a subset of S. grades is a subset of S.
Joint event
An event described by two or more characteristics
e.g. A day in January that is also a Wednesday from all days in 2014
Complement of an event A (denoted A)
All events that are not part of event A
e.g., All days from 2014 that are not in January
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 16
Sample Space
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 17
Fundamental Probability Concepts
A Venn Diagram represents the sample space for the
event(s).
For example, this Venn Diagram illustrates the sample
A B
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 19
Rules of Probability
may be read as
and since both
events occur. This is
a joint probability.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 20
Fundamental Probability Concepts
Example: Recall the snowboarders sample space
defined as S = {gold, silver, bronze, no medal}.
Given the following, find A B, A B, A C,
and Bc.
A = {gold, silver, bronze}.
B = {silver, bronze, no medal}.
C = {no medal}.
Solution:
A B = {gold, silver, bronze, no medal}. Note that there is
no double counting.
A B = {silver, bronze}. A C = (null or empty set).
Bc = {gold}.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 21
Rules of Probability
General Law of Addition
The general law of addition states that the probability of
the union of two events A and B is:
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 22
Rules of Probability
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 23
Rules of Probability
Example: The addition rule.
Anthony feels that he has a 75% chance of getting an A in
Statistics, a 55% chance of getting an A in Managerial
Economics and a 40% chance of getting an A in both
classes. What is the probability that he gets an A in at least
one of these courses?
P AS AM P AS P AM P AS AM
0.75 0.55 0.40 0.90
What is the probability that he does not get an A in either of
these courses? Using the compliment rule, we find
P AS AM
C
1 P A S AM 1 0.90 0.10
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 24
Mutually Exclusive Events
Mutually exclusive events
Events that cannot occur simultaneously
A B
AB A occurs or B occurs
P A B P A P B
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 26
Rules of Probability
Example: The addition rule for mutually exclusive
events.
Samantha Greene, a college senior, contemplates her
future immediately after graduation. She thinks there is a
25% chance that she will join the Peace Corps and a 35%
chance that she will enroll in a full-time law school
program in the United States.
P A B P A P B 0.25 0.35 0.60
P A B
C
1 P A B 1 0.60 0.40
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 27
Collectively Exhaustive Events
Collectively exhaustive events
One of the events must occur
The set of events covers the entire sample space
Example: Randomly choose a day from 2014
A = Weekday; B = Weekend;
C = January; D = Spring;
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 29
Rules of Probability
Conditional Probability
The probability of an event given that another
event has already occurred.
In the conditional probability statement, the
symbol | means given.
Whatever follows | has already occurred.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 30
Rules of Probability
Illustrating Conditional Probabilities with the
Venn Diagram Events A and B
AB
both occur.
A B
A occurs or B occurs
AB
or both occur.
P A B P A P B P A B
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 31
Rules of Probability
Calculating a Conditional Probability
Given two events A and B, each with a positive probability
of occurring, the probability that A occurs given that B has
occurred ( A conditioned on B ) is equal to
P A B
P A | B
P B
P A B
P B | A
P A
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 32
Rules of Probability
Example: Conditional Probabilities
An economist predicts a 60% chance that country A will
perform poorly economically and a 25% chance that
country B will perform poorly economically. There is also
a 16% chance that both countries will perform poorly.
What is the probability that country A performs poorly
given that country B performs poorly?
Let P(A) = 0.60, P(B) = 0.25, and P(A B) = 0.16
P A B 0.16
P A | B 0.64
P B 0.25
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 33
Contingency Tables and Probabilities
Contingency Tables
A contingency table generally shows frequencies for two
qualitative or categorical variables, x and y.
Each cell represents a mutually exclusive combination of
the pair of x and y values.
Here, x is Age Group with two outcomes
while y is Brand Name with three outcomes.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 34
Contingency Tables and Probabilities
Contingency Tables
Note that each cell in the contingency table
represents a frequency.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 35
Contingency Tables and Probabilities
The contingency table may be used to calculate
probabilities using relative frequency.
Note: Abbreviated labels have been used in place
of the class names in the table.
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 36
Contingency Tables and Probabilities
Joint Probability Table
The joint probability is determined by dividing
each cell frequency by the grand total.
Joint
Probabilities
Marginal
Probabilities
For example, the probability that a randomly selected
person is under 35 years of age and makes an Under
Armour purchase is 174
P A B1 0.29
600
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 37
Another example: Organizing &
Visualizing Events
Venn Diagram For All Days In 2014
Sample Space (All Days Days That Are In January and Are
In 2014) Wednesdays
January Days
Wednesdays
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 38
Organizing & Visualizing Events
(continued)
Wed. 5 47 52
Not Wed. 27 286 313
286
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 39
Definition: Simple Probability
P(Jan.) = 32 / 365
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 40
Definition: Joint Probability
Joint Probability refers to the probability of an
occurrence of two or more events (joint event).
ex. P(Jan. and Wed.)
ex. P(Not Jan. and Not Wed.)
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 42
Joint Probability Example
Wed. 5 47 52
Not Wed. 27 286 313
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 43
Marginal Probability Example
P(Wed.)
5 48 53
P (Jan. and Wed.) P(Not Jan. and Wed. )
365 365 365
Wed. 5 48 52
Not Wed. 27 286 313
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 44
Marginal & Joint Probabilities In A
Contingency Table
Event
Event B1 B2 Total
A1 P(A1 and B1) P(A1 and B2) P(A1)
A2 P(A2 and B1) P(A2 and B2) P(A2)
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 45
Probability Summary So Far
Probability is the numerical measure
of the likelihood that an event will 1 Certain
occur
The probability of any event must be
between 0 and 1, inclusively
0 P(A) 1 For any event A 0.5
The sum of the probabilities of all
mutually exclusive and collectively
exhaustive events is 1
P(A) P(B) P(C) 1
0 Impossible
If A, B, and C are mutually exclusive and
collectively exhaustive
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 46
General Addition Rule
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 47
General Addition Rule Example
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 48
Computing Conditional
Probabilities
A conditional probability is the probability of one
event, given that another event has occurred:
P(A and B) The conditional
P(A | B) probability of A given
P(B) that B has occurred
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 50
Conditional Probability Example
(continued)
Of the cars on a used car lot, 70% have air conditioning
(AC) and 40% have a GPS and
20% of the cars have both.
GPS No GPS Total
AC 0.2 0.5 0.7
No AC 0.2 0.1 0.3
Total 0.4 0.6 1.0
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 52
Using Decision Trees
.2
Given AC or .7 P(AC and GPS) = 0.2
no AC:
P(AC and GPS) = 0.5
.5
.7
All Conditional
Probabilities
Cars
.2
.3 P(AC and GPS) = 0.2
P(A | B) P(A)
Events A and B are independent when the probability
of one event is not affected by the fact that the other
event has occurred
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 55
Multiplication Rules
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 56
Marginal Probability
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 57
Bayes Theorem
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 58
Bayes Theorem
P(A | B i )P(B i )
P(B i | A)
P(A | B 1 )P(B 1 ) P(A | B 2 )P(B 2 ) P(A | B k )P(B k )
where:
Bi = ith event of k mutually exclusive and collectively
exhaustive events
A = new event that might impact P(Bi)
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 59
Bayes Theorem Example
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 60
Bayes Theorem Example
(continued)
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 61
Bayes Theorem Example
(continued)
Sum = 0.36
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 63
Counting Rules Are Often Useful
In Computing Probabilities
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 64
Counting Rules
kn
Example
If you roll a fair die 3 times then there are 63 = 216 possible
outcomes
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 65
Counting Rules
(continued)
Counting Rule 2:
If there are k1 events on the first trial, k2 events on
the second trial, and kn events on the nth trial, the
number of possible outcomes is
(k1)(k2)(kn)
Example:
You want to go to a park, eat at a restaurant, and see a
movie. There are 3 parks, 4 restaurants, and 6 movie
choices. How many different possible combinations are
there?
Answer: (3)(4)(6) = 72 different possibilities
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 66
Counting Rules
(continued)
Counting Rule 3:
The number of ways that n items can be arranged in
order is
n! = (n)(n 1)(1)
Example:
You have five books to put on a bookshelf. How many
different ways can these books be placed on the shelf?
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 67
Counting Rules (continued)
Counting Rule 4:
Permutations: The number of ways of arranging X objects
selected from n objects in order is
n!
n Px
(n X)!
Example:
You have five books and are going to put three on a bookshelf.
How many different ways can the books be ordered on the
bookshelf?
n! 5! 120
Answer: n Px 60 different possibilities
(n X)! (5 3)! 2
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 68
Counting Rules
(continued)
Counting Rule 5:
Combinations: The number of ways of selecting X
objects from n objects, irrespective of order, is
n!
n Cx
X!(n X)!
Example:
You have five books and are going to select three are to
read. How many different combinations are there, ignoring
the order in which they are selected?
n! 5! 120
Answer: n Cx 10 different possibilities
X!(n X)! 3! (5 3)! (6)(2)
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 69
Chapter Summary
In this chapter we discussed:
THANK YOU!
Copyright 2015, 2012, 2009 Pearson Education, Inc. Chapter 04, Slide 71