Probability & Statistical Modelling

AQ077-3-2-PSMOD and Version VD1

Concept of Probability
 Topic & Structure of The Lesson
 Introduction
 Terminologies
 Rules of Probability
 Tree Diagram
 Use of Venn diagram to solve probability
 Contingency tables
 Bayes’ Theorem

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Learning Outcomes

• At the end of this topic, You should be able

to
Model /analyse simple business situations using
probability.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Key Terms You Must Be Able To
Use
• If you have mastered this topic, you should be able to use the following
terms correctly in your assignments and exams:
 Addition Rule
 Mutually Exclusive
 Not mutually exclusive
 Multiplication Rule
 With Replacement
 Without Replacement
 Independent events
 Dependent events
 Probability tree diagram
 Conditional Probability

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Introduction

 Probability is the likelihood or chance of

something happening.
 In an experiment in which all outcomes are equally
likely, the probability of an event E is

number of favourable outcomes n(E)

P( E )  
total number of outcomes n(S)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  (e.g. we might say that there is a 80% chance or
0.8 chance that outcome A will happen; we would
then implying that there is a 20% or 0.2 chance
that A would not occur.)
 In Statistics , probabilities will be more commonly
expressed as proportions than as percentages.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  0  p(E)  1
 If P(E) = 0, E is called an impossible event
 If P(E) = 1, E is called a certain event.
 The sum of the probabilities of all the outcomes of
an experiment must total 1.
 P(E does not occur) = 1 – P(E)
 (Complementary probability)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Terminologies

 Statistical event
 it is defined as any subset of the given outcome set
that is of interest
 Statistical experiment
 it is described as any situation , specially set up or
occurring naturally, which can be performed,
enacted or otherwise considered in order to gain
useful information

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  Sample space

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  Complement Rule

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.1

• A group of 20 university students contains

eight who are in their first year of study. A
student is picked at random. Find the
probability that the student is not in the
first year of study.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Probability Rule for Combined
Events

P(A  B) = P(A) + P(B) – P(A  B)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Quick Review Question

Example 1.2
 If a card is drawn from a deck of playing cards,
what is the probability of getting a red or an ace?

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.3

• In a class of 20 children, 4 of the boys and 3

of the eleven girls are in the athletics team. A
child from the class is chosen at random. Find
the probability that the child chosen is
(a) in the athletics team
(b) a girl
(c) a girl member of the athletics team
(d) a girl member or in the athletics team.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  Mutually exclusive events
 Two events of the same experiment are said to be
mutually exclusive if their respective events do not
overlap.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  Not mutually exclusive
 If two or more events occur at one time.
 Independent events
 Two events are said to be independent if the
occurrence (or not) of one of the events will in no
way affect the occurrence (or not) of other.
 Alternatively, two events that are defined on two
physically different experiments are said to be
independent.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

AQ077-3-2 Probability and Statistical Modelling Concept of Probability
 Example 1.4

In a race in which there are no dead heats, the

probability that John wins is 0.3, the probability
that Paul wins is 0.2 and the probability that Mark
wins is 0.4. Find the probability that
(a) John or Mark wins.
(b) John or Paul or Mark wins.
(c) someone else wins.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.5

A card is drawn from a bag contains 5 red

cards numbered 1 to 5 and 3 green cards
numbered 1 to 3. Find the probability that
the card is
(a) a green card or a red card,
(b) a green card or an even number.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  Conditional event
 one of the outcomes of which is influenced by the outcomes
of another event.
• If A and B are two events not necessarily from the
same experiment, then the conditional probability that
A occurs, given that B has already occurred, is written

P(A, given B) = P(A|B) = P(A and B)

P(B)

P(B, given A) = P(B|A) = P(A and B)

P(A)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.6

When a die was thrown, the score was an

odd number. What is the probability that it
was a prime number?

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.7

In a certain college,
65% of the students are full time students
55% of the students are female
35% of the students are male full time students.
Find the probability that a student chosen at random
(a) from all the students in the college is a part time
student.
(b) from all the students in the college is female and a
part time student.
(c) from all the female students in the college is a part
time student.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Rules of Probability

 Addition Rule
 Multiplication Rule

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  General Addition Principle
 If E and F are not mutually exclusive events, then
P(E1E2) = P(E1) + P(E2)-P(E1E2)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Rule of Addition

(i.e.the probability that either E1 or E2 occurs is the

probability that E1 occurs, plus the probability that
E2 occurs)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

  Rule of multiplication
 If A and B are two events, then the probability of
P(A and B), i.e. probability that A and B occur can be calculated
as below:
 Probabilities under conditions of statistical independence
 P(A and B) = P(A) x P(B)
 Probabilities under conditions of statistical dependence
 P(A and B) = P(A) x P(B\A)
 Probability of event B given that A has occurred

P(B|A) = P(A and B)

P(A)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.8

(a) A fair die is thrown twice. Find the

probability that two fives are thrown.
(b) Events A & B are independent and P(A)
= 0.3, P(A  B) = 0.12. Find P(B) and
P(A  B).

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.9

The events A and B are independent and

P(A) =x, P(B) = x + 0.2 and P(A  B) = 0.15.
(a) Find the value of x.
(b) P(A  B)
(c) P(A’ | B’ )

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.10
Three people in an office decide to enter a
marathon race. The respective probabilities that
they will complete the race are 0.9, 0.7 and 0.6.
Assume that their performances are
independent. Find the probability that
(a) they all complete the race.
(b) none complete the race.
(c) at least one completes the race.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Tree Diagrams

 Tree diagram
 It augments the fundamental principle of counting by
exhibiting all possible outcomes of a sequence of events
where each event can occur in a finite number of ways.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.11

In a certain selection of flower seeds, 2/3 have been

treated to improve germination. The seeds which have
been treated have a probability of germination of 0.8,
whereas the untreated seeds have a probability of
germination of 0.5.
(a) Find the probability that a seed, selected at
random, will germinate.
(b) Find the probability that a seed selected at
random had been treated, given that it had
germinated.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.12

Marie is getting married tomorrow, at an outdoor

ceremony in the desert. In recent years, it has
rained only 5 days each year. Unfortunately, the
weatherman has predicted rain for tomorrow.
When it actually rains, the weatherman correctly
forecasts rain 90% of the time. When it doesn't
rain, he incorrectly forecasts rain 10% of the time.
What is the probability that it will rain on the day of
Marie's wedding?

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Venn Diagram

 When events are not mutually exclusive, Venn diagram is useful.

 Note that when completing a Venn diagram , it is essential to deal
with the overlap area first.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Example 1.13
A group of 50 people was asked which of the three
newspapers A, B or C they read. The results showed
that 25 read A, 16 read B, 14 read C, 5 read both A and
B, 4 read both B and C, 6 read C and A and 2 read all
three.
(a) Represent these data on a Venn Diagram.
Find the probability that a person selected at random
from this group reads
(b) only A.
(c) only one of the newspaper.
(d) at least one of the newspaper.

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Contingency Tables

 A table used to classify sample observations according to two or

more identifiable characteristics
 It is a cross tabulation that simultaneously summarizes two
variables of interest and their relationship.
 Example:
A survey of 150 adults classified each as to gender and the number of
movies attended last month. Each respondent is classified according to
two criteria –the number of movies attended and gender.
Gender

Movies Attended Men Women Total

0 20 40 60

1 40 30 70

2 or more 10 10 20

Total 70 80 150

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Posterior Probability

 Bayes Theorem
 It is a formula which can be thought of as ‘reversing’
conditional probability. That is , it finds a conditional
probability (A\B) given, among other things, its inverse
(B\A).
 If A and B are two events of an experiment, then

P(A\B) = P(A) x P(B \ A)

P(B)

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Solution for example 1.12

P(R) = 5/365 P(R') = 360/365

P(F|R) = 0.9 P(F|R') = 0.1
Applying Bayes' Theorem:
P(F | R)P(R) P(F | R)P(R)
P(R | F)  
P(F) P(F | R)P(R)  P(F | R' )P(R' )
0.9( 365
5
) 1
 
0.9( 365
5
)  0.1( 360
365 ) 9

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Summary of Main Teaching Points

Recall
 What is Probability ?
 Rules of Probability
 Using
 Tree Diagram
 Venn Diagram
 Contingency table
to solve the questions on Probability
 Conditional Probability & Posterior Probability

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 Question and Answer Session

Q&A

AQ077-3-2 Probability and Statistical Modelling Concept of Probability

 What we will cover next

 Summary Measures of Statistics

AQ077-3-2 Probability and Statistical Modelling Concept of Probability