Quantitative Skills

Concept of Probability
 Topic & Structure of the lesson

 Introduction
 Terminologies
 Rules of Probability
 Tree Diagram
 Use of Venn diagram to solve probability
 Contingency tables
 Posterior Probability

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 Learning Outcomes

At the end of this topic , You should be able to

 Model /analyse simple business situations using
probability.

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 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

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 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)

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  (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.

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  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)

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 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

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  Sample space

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

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  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.

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  Conditional event
 one of the outcomes of which is influenced by the
outcomes of another event.

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  Complement Rule

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 Quick Review Question

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 Rules of Probability

 Addition Rule
 Multiplication Rule

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 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)

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

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 Quick Review Question

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

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  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)

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 Quick Review Question

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 Conditional Probability

 The probability of event A occurring conditional on B

having occurred.
 It can be written in the form Pr(A/B)

 Pr(A/B) = P(A and B)

P(B)

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 Quick Review Question

Example:
 Of the cars on a used car lot, 70% have air
conditioning (AC) and 40% have a CD player (CD),
20% of the cars have both. What is the probability
that a car has a CD player, given that it has AC ?

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 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.

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 Quick Review Question

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 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.

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 Quick Review Question

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 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

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 Quick Review Question

 Example:

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 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)

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 Quick Review Question

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 Follow Up Assignment

 Tutorial Questions

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 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

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 Question and Answer Session

Q&A

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 Question and Answer Session

16 cards, each written with a letter from the set B, E,

R, T, A, N, G, G, U, N, G, J, A, W, A and B are put
into a box. A card is selected from the box
randomly. What is the probability that the chosen
card has the letter
(a) B?
(b) A ?
(c) T ?

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 Question and Answer Session

A ball is chosen randomly from a bag containing 10

red balls, 7 black balls, 4 yellow balls and 5 green
balls. Find the probability that the ball chosen
• Is black in colour,
• Neither green nor yellow,
• Not yellow.

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 Question and Answer Session

In a class of 40 students, 5 out of the 15 girls and 7

out of the 25 boys are members of the
Mathematics society. A student is selected
randomly. What is the probability that the student
is either a girl or a member of the Mathematics
Society ?

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 Question and Answer Session

A bag contains 4 red marbles, 2 white marbles and

8 black marbles. What is the probability that a
marble picked from the bag in random is either red
or white ?

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 Question and Answer Session

Alwi and Borhan are shooting at a target. The

probability that Alwi’s shot hits the target is ½
and the probability that Borhan’s shot hits the
target is 1/3. Alwi shoots first, then followed by
Borhan. What is the probability that
(a) Both their shots hit the target?
(b) Only one of their shots hits the target?
(c) Noe of their shots hits the target ?

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 Question and Answer Session

Based on the records, 20% of pots supplied by

Factory A have cracks, while 10% of pots supplied
by factory B have cracks. Our company purchases
pots from A and B in the ratio 3:7, what is the
probability that a pot randomly selected has
cracks ?

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 Question and Answer Session

Jing Hong goes to school in the morning by taking

either bus A or bus B. The probability he takes
bus A is 1/3. The probability that he is late when
taking bus A is 1/5 and the probability that he is
late when taking bus B is 1/6.
(a) What is the probability that Jing Hong is late on
Monday ?
(b) Given that he is late, what is the probability that
he has taken bus B ?

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 Question and Answer Session

40% of Malaysian adult males smoke cigarettes.

Among those who smoke, there is a 0.3
probability that they will have lung cancer.
Among the non-smokers, there is also a 0.1
probability that they will have the disease.
(a) What is the probability that a Malaysian male
adult suffer from lung cancer ?
(b) What is the probability that a Malaysian male
adult who is suffering from lung cancer is a
smoker ?

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 Question and Answer Session

In a group of 100 people, 40 of them own cars, 25

own motorcycles and 15 have both. A person is
picked from that group randomly. What is the
probability hat the person
(a) Owns either a car or a motorcycle ?
(b) Owns either a car or motorcycle but not both ?
(c) Owns a motorcycle if he owns a car ?
(d) Does not own a car, given that he has a
motorcycle ?

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 Question and Answer Session

The table below shows the number of students

sitting for each of the subjects in Level exam.
The total number of candidates is 58.
Mathematics 30
Economics 48
History 34
Mathematics and Economics 23
Economics and History 30
Mathematics and History 13

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 Question and Answer Session

(a) Find the probability that a randomly selected

candidate takes
(i) Only Mathematics
(ii) Mathematics and Economics but not History
(iii) All three subjects
(b) What is the probability that a candidate takes
History but not Economics, if he takes
Mathematics ?

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 Question and Answer Session
A senior North Carolina senator knows he will soon
vote on a controversial bill. To learn his
constituents’ attitudes about the bill, he met
with groups in three cities in his state. An aide
jotted down the opinions of 15 attendees at each
meeting.

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 Question and Answer Session

(a) What is the probability that someone from

Chapel Hill is neutral about the bill ? Strongly
opposed ?

(b) What is the probability that someone in the three

city groups strongly supports the bill ?

(c) What is the probability that someone from the

Raleigh or Lumberton groups is neutral or
slightly opposed ?

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 Next Session

 Probability Distribution

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