MODULE 2
PROBABILITY
o Sample Space and Relationships among Events
o Counting Rules Useful in Probability
o Rules of Probability
Decision making entails analysis of whatever available facts and data. Sound
decisions are made because they have sound basis. In case less data are available, brilliant
managers apply the concept of probability. There are people who are bestowed with the
ability to count on and trust their gut feel.
Probability and Statistics
Statistics is the science that deals with the collection of data, organize these data, make
careful analysis, interprets findings, present these usually in quantitative and qualitative form;
arrive at the conclusion and use it for effective business decision making.
Branches:
Descriptive statistics.
When a research is using data gathered on a group or sample to describe or reach
conclusion about that group. Then it is descriptive statistics.
Inferential statistics
When the results in the descriptive statistics are used to generate or reach conclusion about
the population from which the sample is taken, it is inferential (sometimes inductive) statistics.
Population to the total or a collection of person, object, or items of interest. It is the main
subject of a research.
Examples: All automobiles/cars purchased from 2010 to 2018 ; Roads , highways
constructed under a particular construction company; all civil engineers from 1990 – 2015; all
construction equipment’s purchased on 1999 to present; Or all of any subject matter to be
studied
When a researcher gathers data from the whole population for a given measurement
of interest, it is called a census.
A sample is a portion of the whole, hence must be properly taken and use as the
representative of the whole. For various reason a researcher wants to work with a sample of
the population instead of the entire population.
Example:
In conducting quality controlled experiments to determine the average life of a light bulbs
– a light bulb manufactured might randomly example only 75 light bulbs during a
production. Ex; making company morale
Research on the quality of concrete barriers versus the rolling barriers, which one is
effective
When a measurement describe a population, it is called parameter.
A descriptive measure for a sample (only) is called statistics.
Kind of data:
Quantitative – data are described in numbers ex. Income, age
Qualitative – data are described in words, example: low, medium, high; inferior, superios;
effective, not effective.
Levels of measurement (measurement scale)
Nominal level – tells measure classification or categorize.
Examples: engineer; (by profession) ;; teenager, young adult, adult (by age status/maturity)
Ordinal level – used to rank or order objects.
Examples: elementary , secondary (education level); rank and file, supervisor, manager
(employee rank)
In here, the measures, the distance or spacing are not necessarily equal or in consecutive
numbers
Interval levels – have properties of ordinal, but in addition the distances between
consecutive numbers have meaning and the data are always with numerical and at equal
intervals.
Zero point is a matter of convention or convenience and not a natural or fixed zero
point
Zero is another part of the scale, not a zero point
Ratio level data – have the same properties or interval, but ratio data have an absolute zero
and the ratio of 2 numbers are meaningful.