A Survey of Probability Concepts

Chapter 5

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Learning Objectives
LO5-1Define the terms probability, experiment, event, and
outcome
LO5-2Assign probabilities using a classical, empirical, or
subjective approach
LO5-3Calculate probabilities using the rules of addition
LO5-4Calculate probabilities using the rules of
multiplication
LO5-5Compute probabilities using a contingency table
LO5-6Calculate probabilities using Bayes’ theorem
LO5-7Determine the number of outcomes using
principles of counting
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Probability

PROBABILITY A value between 0 and 1 inclusive that represents the

likelihood a particular event happens.

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Questions #1
 PT Railink conducted a survey to over 100 airport train
passengers. Out of the 100 passengers, 72 stated that the
train ride was convenient.

 Is 72 a probability?

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Probability (2 of 2)
EXPERIMENT A process that leads to the occurrence of one and only
one of several possible results.

OUTCOME A particular result of an experiment.

EVENT A collection of one or more outcomes of an experiment.

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Questions #2
 PT Railink conducted a quick one-question survey to over
100 airport train passengers. PT Railink asked whether the
train ride from Soekarno-Hatta airport to BNI Sudirman
Station was convenient or not.

 What is the experiment?

 What is one possible outcome
 Specify one possible event

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Classical Probability
 The classical definition of probability applies when there
are n equally likely outcomes to an experiment

MUTUALLY EXCLUSIVE The occurrence of one event means that

none of the other events can occur at the same time.

COLLECTIVELY EXHAUSTIVE At least one of the events must

occur when an experiment is conducted.

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Questions #3
 Consider an experiment of rolling a six-sided dice. What
is the probability that an odd number appears?

 Consider an experiment of rolling two six-sided dices.

What is the probability that the numbers in the two dices
sum up to 6?

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Questions #4
 A large company must hire a new president. The BoD
prepares a list of five candidates, all of whom are equally
qualified. Two of these candidates are members of a
minority group. To avoid bias in the selection, the
company select the president by lottery

 What is the probability that a minority candidate is hired?

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Empirical Probability
 The empirical definition occurs when the number of times
an event happens is divided by the number of outcomes

EMPIRICAL PROBABILITY The probability of an event happening is

the fraction of the time similar events happened in the past.

LAW OF LARGE NUMBERS Over a large number of trials, the

empirical probability of an event will approach its true probability.

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Subjective Probability

SUBJECTIVE CONCEPT OF PROBABILTIY The likelihood

(probability) of a particular event happening that is assigned by an
individual based on whatever information is available.

 Examples of subjective probability are:

 Estimating the likelihood the New England Patriots will be in
the Super Bowl next year
 Estimating the likelihood the U.S. budget deficit will be
reduced by half in the next 10 years

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Summary of Approaches to Probability

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Questions #5
 Indicate whether classical, empirical, or subjective
probability is used:

 A football player scored 15 out of his last 20 penalties.

The probability that he scores the next penalty is 0.75.
 A seven-member committee of students is formed to study
environmental issues. What is the likelihood that any of
the seven member is randomly chosen as the
spokeperson?
 The probability of a Merapi eruption in the next 5 years is
0.90.

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Rules of Addition
 The rules of addition refer to the probability that any two
or more events can occur
 The special rule of addition is used when the events are
mutually exclusive

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 Rules of Addition Example
A machine fills plastic bags with a mixture of beans, broccoli, and other
vegetables. Most of the bags contain the correct weight, but because of
the variation in the size of the beans and other vegetables, a package
might be underweight or overweight. A check of 4,000 packages filled in
the past month revealed:

 What is the probability that a particular package will be either underweight or

overweight?
P(A or C) = P(A) + P(C) = .025 + .075 = .10

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Questions #6
 The events A and B are mutually exclusive. Suppose that
P(A) = 0.30 and P(B) = 0.20.

 What is the probability of either A or B occurring?

 What is the probability that neither A nor B will happen?

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Complement Rule
 The complement rule is used to determine the probability of
an event happening by subtracting the probability of an
event not happening

 You can also use the complement rule

P(A or C) = P(~B) = 1 − P(B) = 1 − .900 = .10
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Questions #7
 Consider the following employee classification:
 Supervisors, N = 120
 Maintanence, N = 50
 Production, N = 1,460
 Management, N = 302
 Secretarial, N = 68

 What is the probability that the first person selected is:

 Either in management or a secretary?
 Not in management?

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General Rule of Addition
 The general rule of addition is used when the events are
not mutually exclusive

JOINT PROBABILITY A probability that measures the likelihood two

or more events will happen concurrently.

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General Rule of Addition Example
A sample of 200 tourists in Florida shows 120 went to Disney,
100 went to Busch Gardens, and 60 visited both.

P(Disney) =120/200 = .60

P(Busch) =100/200 = .50
P(Disney and Busch) = 60/200 = .30

P(Disney or Busch) = P(Disney) + P(Busch) – P (Disney and Busch)

= .60 + .50 - .30 = .80

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Questions #7
 What is the probability that a card chosen at random from
a standard deck of cards will be either a Queen or a
Diamond?

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Special Rule of Multiplication
 The rules of multiplication are applied when two or more
events occur simultaneously
 The special rule of multiplication refers to events that are
independent
INDEPENDENCE The occurrence of one event has no effect on the
probability of the occurrence of another event.

A survey by the American Automobile Association (AAA)

revealed 60% of its members made airline reservations last year.
Two members are selected at random. What is the probability both
made airline reservations last year?
P(R1 and R2) = P(R1)P(R2) = (.60)(.60) = .36
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General Rule of Multiplication
 The general rule of multiplication refers to events that are
not independent
 A conditional probability is the likelihood an event will
happen, given that another event has already happened
CONDITIONAL PROBABILITY The probability of a particular event
occurring, given that another event has occurred.

 The conditional probability is represented a P(B|A) and is

read, the probability of B given A

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General Rule of Multiplication Example

 A golfer has 12 golf shirts in his closet. Suppose 9 of these

shirts are white and the others are blue. He gets dressed in the
dark , so he just grabs a shirt and puts in on. He plays golf two
days in a row and does not return the shirts to the closet. What
is the probability both shirts are white?

P(W1 and W2) = P(W1)P(W2|W1) = ()(= .55

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Questions #10
 The BoD of a smartphone company consists of 6 men and
4 women. A three-member search committee is to be
chosen at random to conduct a nationwide search for a
new president.

 What is the probability that all of the three search

members will be women?
 What is the probability that all three members will be
men?

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Contingency Tables

CONTINGENCY TABLE A table used to classify sample observations

according to two or more identifiable categories or classes.

 One hundred fifty adults were asked if they were older than 50
years of age and the number of Facebook accounts they used.
The following table summarizes the results.

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Tree Diagrams
 A tree diagram is a visual that is helpful in organizing and
calculating probabilities for problems with several stages
 Each stage of the problem is represented by a branch of
the tree
 Label the branches with the probabilities

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Tree Diagram Example

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Bayes’ Theorem
 Bayes’ Theorem is a method of revising a probability,
given that additional information is obtained
 For two mutually exclusive and collectively exhaustive
events

PRIOR PROBABILITY The initial probability based on the present level

of information.

POSTERIOR PROBABILITY A revised probability based on additional

information.

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Bayes’ Theorem Example
Suppose 5% of the population of Umen have a disease. A1 represents the part
of the population that has the disease and A2 represents those who do not. Let
B denote a test result that shows the disease is present.

P(A1) = .05 Individual has the disease

P(A2) = .95 Individual does not have the disease
P(B|A1) = .90 Test shows the individual has the disease and is correct
P(B|A2) = .15 Test incorrectly shows the individual has the disease

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Bayes’ Theorem Example continued
Randomly
   select an individual and perform the test. The test
results indicate the disease is present. What is the probability
the test is correct?
Use Bayes’ theorem to solve.

P(A1|B) = = = = .24

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Multiplication Formula
 The multiplication formula states that if there are n ways
of doing one thing, and m ways of doing another thing,
then there are m*n ways of doing both

 This can be extended to more than two events. For three

events m, n, and o:
 Total number of arrangements = (m)(n)(o)

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Multiplication Formula Example
 When the American Red Cross receives a blood donation, the blood is
analyzed and classified by group and Rh factor. There are four blood
groups: A, B, AB, and O. The Rh factor can be either positive or negative.
How many different blood types are there?
 Total possible arrangements = (m) (n) = (4) (2) = 8

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The Permutation Formula
 Another counting formula used to determine a total
number of outcomes
PERMUTATION Any arrangement of r objects selected from a single
group of n possible objects.

 
There are three electronic parts to be assembled, so n=3. Because all three
are to be inserted into the plug-in component, r=3.
P = = =6
3 3

Label the parts A, B, and C ABC BAC CAB ACB BCA CBA
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The Combination Formula
 Another counting formula useful in determining the total
number of outcomes
 A combination is an arrangement where the order of the
objects selected is not important

The Grand 16 movie theater uses teams of three employees to work the concession
stand each evening. There are seven employees available to work. How many
different teams can be scheduled?
 7C3 = = = = 35

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 Chapter 5 Practice Problems

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Question 3 LO5-2

A survey of 34 students at the Wall College of Business

showed the following majors:

 From the 34 students, suppose you randomly select a

student.
 What is the probability he or she is a management major?
 Which concept of probability did you use to make this
estimate?

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Question 5 LO5-2

In each of the following cases, indicate whether classical, empirical,

or subjective probability is used.

1. A baseball player gets a hit in 30 out of 100 times at bat. The

probability is .3 that he gets a hit in his next at bat.
2. A seven-member committee of students is formed to study
environmental issues. What is the likelihood that any one of the
seven is randomly chosen as the spokesperson?
3. You purchase a ticket for the Lotto Canada lottery. Over five
million tickets were sold. What is the likelihood you will win the
$1 million jackpot?
4. The probability of an earthquake in northern California in the
next 10 years above 5.0 on the Richter Scale is .80.
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Question 13 LO5-3

A study of 200 advertising firms revealed their income after

taxes:

1. What is the probability an advertising firm selected at

random has under $1 million in income after taxes?
2. What is the probability an advertising firm selected at
random has either an income between $1 million and
$20 million, or an income of $20 million or more? What
rule of probability was applied?
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Question 21 LO5-3

The aquarium at Sea Critters Depot contains 140 fish. Eighty of

these fish are green swordtails (44 female and 36 male) and 60
are orange swordtails (36 female and 24 males). A fish is
randomly captured from the aquarium:

1. What is the probability the selected fish is a green

swordtail?
2. What is the probability the selected fish is male?
3. What is the probability the selected fish is a male green
swordtail?
4. What is the probability the selected fish is either a male or a
green swordtail?
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Question 25 LO5-4

 A local bank reports that 80% of its customers maintain a

checking account, 60% have a savings account, and 50%
have both. If a customer is chosen at random:

1. What is the probability the customer has either a

checking or a savings account?
2. What is the probability the customer does not have
either a checking or a savings account?

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Question 23 LO5-4

 Suppose P(A) = 0.40 and P(B|A) = 0.30. What is the joint

probability of A and B?

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Question 26 LO5-4

 All seasons plumbing has two service trucks that

frequently need repair. If the probability the first truck is
available is 0.75, the probability the second truck is
available is 0.50, and the probability that both trucks are
available is 0.30. What is the probability neither truck is
available?

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Question 27 LO5-4
First Event
Second Event A1 A2 A3 Total
B1 2 1 3 6
B2 1 2 1 4
Total 3 3 4 10
 Determine P(A1)
 Determine P(B1|A2)
 Determine P(B2 and A3)

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Question 29 LO5-5
 Each salesperson at Puchett, Sheets, and Hogan Insurance Agency is rated
either below average, average, or above average with respect to sales
ability. Each salesperson also is rated with respect to his or her potential
for advancement—either fair, good, or excellent. These traits for the 500
salespeople were cross-classified into the following table.

1. What is this table called?

2. What is the probability a salesperson selected at random will have above
average sales ability and excellent potential for advancement?
3. Construct a tree diagram showing all the probabilities, conditional
probabilities, and joint probabilities.

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Question 35 LO5-6

 The Ludlow Wildcats baseball team, a minor league team

in the Cleveland Indians organization, plays 70% of their
games at night and 30% during the day. The team wins
50% of their night games and 90% of their day games.
According to today’s newspaper, they won yesterday.
What is the probability the game was played at night?

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Question 38 LO5-6

 One-fourth of the residents of the Burning Ridge Estates

leave their garage doors open when they are away from
home. The local chief of police estimates that 5% of the
garages with open doors will have something stolen, but
only 1% of those closed will have something stolen. If a
garage is robbed, what is the probability the doors were
left open.

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Question 41 LO5-7

 A polister randomly selected four of 10 available people.

How many different groups of four are possible?

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Question 41 LO5-7

 A telephone number consists of seven digits, and the first

three representing the exchange. How many different
telephone numbers are possible within the 537 exchange?

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Question 43 LO5-7

 An overnight express company must include five cities on

its route. How many different routes are possible,
assuming that it does not matter in which order the cities
are included in the routing?

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Question 46 LO5-7

 A company is creating three new divisions and seven

managers are eligible to be appointed head of a division.
How many different ways could the three new heads be
appointed? Hint: assume the division assignment makes a
difference.

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