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Goals
• Probability Concepts
1. Define probability
2. Understand the terms:
• Experiment
• Outcome
• Event
3. Describe these approaches to probability:
• Classical
• Empirical
• Subjective
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Goals
• Probability Concepts
4. Calculate probabilities applying these rules:
• Rules of addition
• Rules of multiplication
5. Define the terms:
• Conditional probability
• Joint probability
6. Contingency Tables
7. Use a tree diagram to organize and compute
probabilities
8. Principles of Counting
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Types Of Statistics
Inferential Statistics
A decision, estimate, prediction, or
generalization about a population, based on
a sample
(Second part of definition of statistics)
Also known as:
Statistical inference
Inductive statistics
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Statistical Inference Or
Inferential Statistics
Computing the chance that something will
occur in the future!
This means that we will have to make
decisions with incomplete information
Seldom does a decision maker have complete
information from which to make a decision:
Marketers taking samples about a product name
Tests for wire tensile strength
Which player should the Mariners draft?
Should the soap opera Days of Our Lives be
discontinued immediately?
Should I marry Jean? 5
Future Uncertainty
“Because there is uncertainty in decision
making, it is important that all the known
risks involved be evaluated scientifically”
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Define Probability
“Chance,” Likelihood,” Probability”
A number between zero & one, inclusive,
describing the relative possibility (chance
or likelihood) an event will occur in the
future
Decimal or fraction: .25 = ¼, etc.
0 ≤ P (x) ≤ 1
x means “the event”
P means probability
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00
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• Define Probability • Probability
1. A value of zero means it Is the probability that a
cannot happen World Series will happen
2. A value near zero means in 2006 close to one or to
the event is not likely to zero?
happen Is the probability that a
3. A value of one means it is company will name a new
certain to happen breakfast cereal “Crud
4. A value near one means it That Hurts Your Tummy”
is likely close to one or to zero?
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Understand The Terms:
• Experiment
• Doing something and observing the one result
• Outcome
• A particular result of the experiment
• Event
A collection of one or more outcomes of an
experiment
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Define: Experiment
A process that leads to the occurrence of one
and only one of several possible observations
Example: roll die & there are 6 possible
outcomes
Ask 250 Highline students whether they
drink coffee
An experiment has two or more possible
results (outcomes), and it is uncertain which
will occur
An experiment is the observation of some
activity or the act of taking some
measurement
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Define: Outcome
An outcome is the particular result of an
experiment
Examples:
When you toss a coin, the possible outcomes are:
Heads
Tails
When you survey 1000 people and ask whether they
will vote for candidate 1 or candidate 2, some of the
possible outcomes are:
455 would vote for candidate 1
592 would vote for candidate 1
780 would vote for candidate 1…
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Define: Event
When one or more of the experiment’s outcomes
are observed, we call this an event!
An event is the collection of one or more
outcomes of an experiment
Example:
Roll die:
An even number can be an event
Boomerang tournament:
More than ½ the participants earned more than 60 points in
the Trick Catch event
Political poll:
Less than 50% of those polled said they would vote for
candidate A
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Experiment, Outcome, Event
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Venn Diagram
Sample Space
Event A
P(A) =.2
A
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Definitions
Collectively Exhaustive
At least one of the events must occur when an
experiment is conducted
If an experiment has a set of events that include
every possible outcome, such as the events “an
even number” and “an odd number,” then the set of
events is collectively exhaustive
Mutually Exclusive & Collectively
Exhaustive
If a set of events is mutually Probability
exclusive & collectively
exhaustive, then the sum of the Event: Head 0.5
probabilities are equal to 1 Event: Tail 0.5
Total 1
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Definitions
Independent
Events are independent if the occurrence of one
event does not affect the occurrence of another
(sample space is not changed)
The roll of a six, does not affect the next roll
P(B│A) = P(B)
Dependent
Events are dependent if the occurrence of one event
affects the occurrence of another event (sample
space is changed)
The chances of pulling a heart from a deck of cards? 13/52.
But if you don’t put the card back (without replacement), what
is the probability that you pull a heart next time? It depends:
13/51 or 12/51
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Definitions
Conditional Probability
The probability of a particular event occurring,
given that another event has occurred
The sample space will change
The probability of the event B given that
the event A has occurred is written P(B|A)
In the heart example, 13/51 or 12/51 are
conditional probabilities Line means “given that.”
“Probability that B will
occur given that A has
already occurred” 19
Definitions
Joint Probability
A joint probability measures the likelihood that
two or more events will happen concurrently
An example would be the event that a student has
both a DVD Player and TV in his or her dorm room
Root probabilities
Sample times conditional
Space probabilities equal
Has a Has a joint probabilities
DVD TV (Tree Diagrams)
player
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Classical Approach To Probability
The Classical definition applies when there
are n equally likely outcomes
Each outcome must have the same chance of
occurring (fairness)
Events must be mutually exclusive &
collectively exhaustive
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Classical Approach To Probability
A fair die is rolled once.
The experiment is rolling the die.
The possible outcomes are the numbers 1, 2, 3,
4, 5, and 6.
An event is the occurrence of an even number.
That is, we collect the outcomes 2, 4, and 6.
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Empirical Approach To Probability
The empirical definition applies when the number
of times the event happens (in past) is divided by
the number of observations
The probability of an event happening is the fraction of
the time similar events happened in the past.
“Relative Frequency”
Law of Large Numbers: Over a large number of
trials the empirical probability of an event will
approach its true probability. This law allows us to
use relative frequencies to make predictions.
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P( A) 0.155
1200
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And
And = Both = = Intersection
Or
Or = Either Or or Both
= = Union
(inclusive or)
Joint Probability
P(A and B)
Sample
Space Event A
Has a Event B
DVD In this
Has a TV
player player circumstance,
Events A & B are
not mutually
exclusive!
P(A or B) 30
Calculate Probabilities Applying
These Rules:
• Rules of addition
• Rules of multiplication
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Rules Of Addition
P(A and B)
Event A Event B
P(A) P(B)
P(A or B)
General Rule
of Addition P(A or B) = P(A) + P(B) - P(A and B)
Event A Event B
P(A) P(B)
P(A or B)
General Rule
of Addition P(A or B) = P(A) + P(B) - P(A and B)
Special Rule
of Addition P(A or B) = P(A) + P(B)
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Rules Of Addition Example 1
New England Commuter Airways recently
supplied the following information on their
commuter flights from Boston to New York:
Arrival Frequency
Early 100
On Time 800
Late 75
Canceled 25
Total 1000
Rules Of Addition Example 1
Arrival Event Frequency P(X) P(X)
Early E 100 P(E) 0.1000
On Time O 800 P(O) 0.8000
Late L 75 P(L) 0.0750
Canceled C 25 P(C) 0.0250
1000 1
TV
175
Both
S 100
320
In this circumstance,
Events P(S and TV)
What is the sample space? are not mutually
exclusive!
Rules Of Addition Example 2
If a student is selected at random, what
is the probability that the student has:
Only a music sound system
Only a TV
Both a music sound system and TV
Special Rule
of Multiplication P(A and B) = P(A) * P(B)
IBM 5-year stock prices
GE
Example 1 30
Stock price $
25
20
15
1. IBM 1 2 3
Year
4 5
General Rule
of Multiplication P(A and B) = P(A) * P(B|A)
General Multiplication Rule Example 1
Now you have ten boomerangs and two of them have
blemishes
We want to select one after the other
What is the probability of selecting a blemished boom
followed by another blemished boom?
The sample space will change (without replacement)
The second P(X) is dependent on the first
P(Bblemish1)* P(Bblemish2) = 2/10*1/9 = 2/90 .0222
Example 2:
In class example with women & men: what is the probability
of selecting from a hat the names of three women
10/20*9/19*8/18 = .105263158
In Class
Women in class Men in class Conditional Probabilities
10 10 1/2 = 0.500
9 9 9/19 = 0.474
8 8 4/9 = 0.444
7 7 7/17 = 0.412
6 6 3/8 = 0.375
5 5 1/3 = 0.333
4 4 2/7 = 0.286
3 3 3/13 = 0.231
2 2 1/6 = 0.167
1 1 1/11 = 0.091
Joint Probabilities
P(Selecting 1 straight women - without replacement) = 1/2 = 0.5000000
P(Selecting 2 straight women - without replacement) = 9/38 = 0.2368421
P(Selecting 3 straight women - without replacement) = 2/19 = 0.1052632
P(Selecting 4 straight women - without replacement) = 14/323 = 0.0433437
P(Selecting 5 straight women - without replacement) = 21/1292 = 0.0162539
P(Selecting 6 straight women - without replacement) = 7/1292 = 0.0054180
P(Selecting 7 straight women - without replacement) = 1/646 = 0.0015480
P(Selecting 8 straight women - without replacement) = 3/8398 = 0.0003572
P(Selecting 9 straight women - without replacement) = 1/16796 = 0.0000595
P(Selecting 10 straight women - without replacement) = 1/184756 = 0.0000054
A contingency table is
used to classify
observations according to
two identifiable
characteristics.
Contingency tables are used
when one or both variables are
nominally or ordinally scaled.
A contingency table is a
cross tabulation that
simultaneously
summarizes two variables
of interest.
General Multiplication Rule Example 2
Contingency Table (Cross-classified)
Executives were asked whether or not they would remain with the
company if they received a better offer from a different company
Length of Service
Less than 1-5 6-10 More than
Loyalty 1 year years years 10 years Total
Would remain 10 30 5 75 120
Would not remain 25 15 10 30 80
Root Conditional Joint 200
Probability Probability Probability
P(Randomly selecting
executive who Would
= 120/200 * 75/120 = 0.6 * 0.625 = 0.375
remain and who has More
than 10 years)
P(Randomly selecting
executive who Would not = 80/200 * 30/80 = 0.4 * 0.375 = 0.15
remain and who has More
than 10 years)
General Multiplication Rule Example 2
Contingency Table (Cross-classified)
Executives were asked whether or not they would remain with the
company if they received a better offer from a different company
Length of Service
Less than 1-5 6-10 More than
Loyalty 1 year years years 10 years Total
Would remain 10 30 5 75 120
Would not remain 25 15 10 30 80
200
80/200 35/200
Addition Rule:
P(Would Not Remain or Has Less Than 1 Year Experience) =
80/200 + 35/200 – 25/200 = 90/200 = .45
P(Select 1-5 Years Experience) = 45/200
P(Would Not Remain given that 1-5 Years) = 15/45
Use A Tree Diagram To Organize And Compute
Probabilities
• Each segment of the tree is one stage in the problem
• The branches of a tree diagram are weighted by
probabilities
Steps:
1. Draw heavy dots on left to represent the root of the
tree
2. Two main branches are drawn with “root probabilities”
3. Create branches for each conditional probability
4. Write out Joint Probabilities
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Draw Heavy Dots On Left To Represent The
Root Of The Tree & Draw Two Main Branches
With “Root
Loyalty
Probabilities”
Conditional P(X) Service Joint P(X)
Σ 1.00000
Σ 1.00000 Σ 1.00000
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Create Branches For Each Conditional
Probability
Loyalty Conditional P(X) Service Joint P(X)
Σ 1.00000
Σ 1.00000 Σ 1.00000
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Write Out Joint Probabilities
Loyalty Conditional P(X) Service Joint P(X)
Σ 1.00000
Σ 1.00000 Σ 1.00000
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Don’t Forget To Extend The Rules:
Special Rule
of Addition P(A or B or C) = P(A) + P(B) + P(C)
Special Rule
of Multiplication P(A or B or C) = P(A) * P(B) * P(C)
General Rule
of Multiplication P(A and B and C) = P(A) * P(B|A) * P(C|A and B)
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Some Principles Of Counting
1. Multiplication Formula
2. Combination Formula
3. Permutation Formula
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Multiplication Formula
The multiplication formula indicates that if
there are m ways of doing one thing and n
ways of doing another thing, there are m x n
ways of doing both
m x n indicates the number of ways they can be
done in sequence, or the number of outcomes, or
number of arrangements
5! = 1*2*3*4*5 = 120
5!/3! = 1*2*3*4*5/1*2*3 = 4*5 = 20
Use your Calculator
Use Excel Functions (see page 169)
******Note
0! = 1
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Combinations
Order Not Important
n!
nCr
r! (n r )!
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Combination Example
There are 12 players on the Highline
basketball team. Coach Che Dawson must
pick five players among the twelve on the
team to comprise the starting lineup. How
many different groups are possible?
12!
12C 5 792
5! (12 5)!
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Permutations
Order Important
A permutation is any arrangement of r objects
selected from n possible objects
n!
n Pr
( n r )!
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Permutations Example
12!
12 P 5 95,040
(12 5)!
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Law of Large Numbers
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