ACTED 061L –

STATISTICAL ANALYSIS
Basic Probability WITH SOFTWARE
APPLICATION
Concepts

Prepared By
Cynthia SM Jacob
School of Business, Management, and Accountancy
 Intended Learning Outcomes

At the end of the lesson, the student should be able to:

1. solve problems on probability
2. compute probabilities using PhStat

Basic Probability Concepts

 Kinds of Probability
Marginal probability – the probability of a single event
Union probability – the probability that one event, or
another, or both will occur
Joint probability – the probability that one event and
another will both occur
Complementary probability – the probability that an event
will not occur
Conditional probability – the probability that an event will
occur, given that another event has already occurred

Basic Probability Concepts

 The Contingency Table
Example: Consider a police force that consists of 1200 officers – 960 men and
240 women. Over the past two years, 324 officers on the police force received
promotions, with the breakdown in the table below.
Men(M) Women (W) Total
Promoted (A) 288 36 324
Not Promoted
672 204 876
(A’)
Total 960 240 1200
If an officer will be randomly selected from the 1200 officers, what is the
probability that:
The officer is a woman and was not promoted?
The officer is a man or was promoted?

Basic Probability Concepts

 Conditional probability
What is the probability that the officer is a woman if she was promoted?
Conditioning event – that an officer is promoted
General rule for conditional probability
! "∩$ ! "∩$
𝑃 𝐴𝐵 = ! $
or 𝑃 𝐵 𝐴 = ! "

Men(M) Women (W) Total

Promoted (A) 288 36 324
Not Promoted (A’) 672 204 876
Total 960 240 1200
! %∩" &'/)*++ &'
P(W|A) = ! "
= !"# = &*, ≈ 0.1111
$"%%

Basic Probability Concepts

 Conditional probability
Consider a newspaper circulation department where it is known that 84% of the households in a
particular neighborhood subscribe to the daily edition of the paper. It is also known that 75% of the
households subscribe to the Sunday edition of the same paper. Let D denote the event that a
household subscribes to the daily edition and S the event that a household subscribes to the Sunday
edition. If 24% of the households subscribe to the daily edition but not the Sunday edition, what is
the probability that a randomly selected household subscribes to the Sunday edition if it does not
subscribe to the daily edition?

D D’
!(.∩/& )
P(S|D’) = = S
!(/& )
S’

Basic Probability Concepts

 Independent Events
Two events A and B are independent if the occurrence of one does
not affect or is not related to the occurrence of the other. That is,
𝑃 𝐴 𝐵 = 𝑃 𝐴 or 𝑃 𝐵 𝐴 = 𝑃 𝐵
if A and B are independent.

If 𝑃 𝐴 𝐵 ≠ 𝑃(𝐴), then A and B are dependent events.

Basic Probability Concepts

 Independent Events
Example: Forty-three percent of Americans use social media and other websites to voice
their opinions about television programs (The Huffington Post, November 23, 2011).
Below are the results of a survey of 1364 individuals who were asked if they use social
media and other websites to voice their opinions about television programs.

a. What is the probability a respondent is female?

b. What is the conditional probability a respondent uses social media and other websites
to voice opinions about television programs given the respondent is female?
c. Are events F and A independent?

Basic Probability Concepts

 Independent Events
The multiplication law is used to compute the probability of the intersection of two events,
or their joint probability.
𝑃 𝐴 ∩ 𝐵 = 𝑃(𝐵)×𝑃(𝐴|𝐵) or 𝑃 𝐴 ∩ 𝐵 = 𝑃(𝐴)×𝑃(𝐵|𝐴)

If A and B are independent, the multiplication law reduces to:

𝑃 𝐴 ∩ 𝐵 = 𝑃(𝐵)×𝑃(𝐵)
Example: Consider a service station manager who knows from experience that 80% of the
customers use credit card when making a gasoline purchase. What is the probability that
the next two customers will each use a credit card?
Let A – event that the first customer uses a credit card;
B – event that the second customer uses a credit card
Given no further information, it can be reasonably assumed that A and B are independent
events. Hence,
𝑃 𝐴 ∩ 𝐵 = 𝑃 𝐴 ×𝑃 𝐵 = 0.80×0.80 = 0.64

Basic Probability Concepts

 Joint Probability and the Multiplication Law
A company has 140 employees, of which 30 are supervisors. Eighty of the employees are
married, and 20% of the married employees are supervisors.
a. If a company employee is selected, what is the probability that the employee is married
and is a supervisor?
b. Construct the probability matrix.
c. What is the probability that a supervisor,
selected at random, is married?

Basic Probability Concepts

 Mutually Exclusive and Independent Events
Do not confuse the notion of mutually exclusive events with that of
independent events.
Two events with nonzero probabilities cannot be both mutually
exclusive and independent.
If one mutually exclusive event is known to occur, the other cannot
occur.
Thus, the probability of the other event occurring is reduced to zero.
They are therefore dependent.

Basic Probability Concepts

 Methods of Counting
1. Counting rule for multiple-step experiments
2. Permutation
Example: Suppose that a Business College has several departments to be denoted
by A, B, C, D, E, F, and G. Each department has one representative on the college’s
student council. From these seven representatives, one is to be chosen Chair,
another is to be selected Vice Chair, and a third will be Secretary. How many ways
are there to select the three officers?
3. Combination
A university warehouse has received a shipment of 25 printers, of which 10 are
laser printers and 15 are inkjet models. If 6 of these 25 are selected at random to
be checked by a particular technician, what is the probability that exactly 2 of
those selected are laser printers (so that the other 4 are inkjets)?

Basic Probability Concepts

 Exercises
In a box are ten books that are to be arranged on a shelf. The shelf can only
accommodate 3 of the books.
a. In how many ways can 3 books from the box be arranged on the shelf?

b. What is the probability that the owner will see his three favorite books arranged
on the shelf?

Basic Probability Concepts