Chapter 4 - Introduction to Probability
4.1 - Random Experiments, Counting Rules, and Assigning Probabilities
4.2 - Events and Their Probabilities
4.3 - Some Basic Relationships of Probability
4.4 - Conditional Probability
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Uncertainties
• Managers often base their decisions on an analysis of uncertainties such as the
following:
• What are the chances that the profits will decrease if we increase prices?
• What are the odds that a new investment will be profitable?
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Probability (xác suất)
• Probability is a numerical measure of the likelihood that an event will occur.
• Probability values are always assigned on a scale from 0 to 1.
• A probability near zero indicates an event is quite unlikely to occur.
• A probability near one indicates an event is almost certain to occur.
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Statistical Experiments
• In statistics, the notion of an experiment differs somewhat from that of an
experiment in the physical sciences.
• In statistical experiments, probability determines outcomes.
• Even though the experiment is repeated exactly the same way, an entirely
different outcome may occur.
• For this reason, statistical experiments are sometimes called random
experiments.
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Random Experiment and Its Sample Space (1 of 2)
• A Random experiment (phép thử ngẫu nhiên) is a process that generates well-
defined experimental outcomes.
• The sample space (không gian mẫu) for an experiment is the set of all
experimental outcomes.
• An experimental outcome is also called a sample point (điểm mẫu).
Experiment Experimental Outcomes
Toss a coin Head, tail
Inspect a part Defective, non-defective
Conduct a sale call Purchase, no purchase
Roll a die 1, 2, 3, 4, 5, 6
Play a football game Win, loss, tie
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Random Experiment and Its Sample Space (2 of 2)
Example: Bradley Investments
Bradley has invested in two stocks, Markley Oil and Collins Mining. Bradley has determined
that the possible outcomes of these investments three months from now are as follows:
Investment Gain or Loss in 3 Months (in $1000s):
Markey Oil Collins Mining
M={10,5,0,-20}
10 8
C= {8,-2}
5 -2
0 EMPTY CELL
-20 . EMPTY CELL
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A Counting Rule for Multiple-Step Experiments
• If an experiment consists of a sequence of k steps in which there are n1 possible
results for the first step, n2 possible results for the second step, and so on, then
the total number of experimental outcomes is given by (n1)(n2) . . . (nk).
• A helpful graphical representation of a multiple-step experiment is a tree
diagram.
Markley Oil: n1 = 4
Collins Mining: n2 = 2
Total number of experimental outcomes: (4)(2) = 8.
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Tree Diagram (1 of 2)
Example: Bradley Investments
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Counting Rule for Combinations (Tổ hợp)
• Number of Combinations of N Objects Taken n at a Time
• A second useful counting rule enables us to count the number of experimental
outcomes when n objects are to be selected from a set of N objects.
The factorial
of N (N giai
thừa)
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Counting Rule for Permutations (Hoán vị)
• Number of Permutations of N Objects Taken n at a Time
• A third useful counting rule enables us to count the number of experimental
outcomes when n objects are to be selected from a set of N objects, where the
order of selection is important.
𝑁 𝑁
𝑃 𝑛 = 𝐶𝑛 × 𝑛 !
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Combinations and Permutations example
1. Twelve individuals are candidates for positions of president and vice president
of an organization. How many possibilities of selections exist?
N= 12
n=2
=> P=132
2. From among 8 students how many committees consisting of 4 students can be
selected?
N= 8
n=4
=> C=70
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Combinations and Permutations example
1. Twelve individuals are candidates for positions of president and vice president
of an organization. How many possibilities of selections exist?
Answer: 132
2. From among 8 students how many committees consisting of 4 students can be
selected?
Answer: 70
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Assigning Probabilities (1 of 2)
Basic Requirements for Assigning Probabilities
1. The probability assigned to each experimental outcome must be between 0 and 1,
inclusively.
where Ei is the ith experimental outcome and P(Ei) is its probability
2. The sum of the probabilities for all experimental outcomes must equal 1.
where n is the number of experimental outcomes.
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Assigning Probabilities (2 of 2)
• Classical Method
Assigning probabilities based on the assumption of equally likely outcomes
• Relative Frequency Method
Assigning probabilities based on experimental or historical data
• Subjective Method
Assigning probability based on judgment
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Classical Method
Example: Rolling a Dice
If an experiment has n possible outcomes, the classical method would assign a
probability of 1/n to each outcome.
Experiment: Rolling a dice
Sample Space: S = {1, 2, 3, 4, 5, 6}
Probabilities: Each sample point has a 1/6 chance of occurring
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Relative Frequency Method
Example: Lucas Tool Rental
Lucas Tool Rental would like to assign probabilities to the number of car polishers it rents
each day. Office records show the following frequencies of daily rental for the last 40 days.
Each probability assignment is given by dividing the frequency (number of days) by the
total frequency (total number of days).
Number of Polishers Rented Number of Days Probability
0 4 .10 = 4/40
1 6 .15
2 18 .45
3 10 .25
4 2 .05
sum 40 1.00
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Roll a dice
Outcome Freq Probabilities
1 10 0.1
2 15 0.15
3 20 0.2
4 25 0.25
5 20 0.2
6 10 0.1
100 1
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Subjective Method (1 of 2)
• When economic conditions or a company’s circumstances change rapidly, it
might be inappropriate to assign probabilities based solely on historical data.
• We can use any data available as well as our experience and intuition, but
ultimately a probability value should express our degree of belief that the
experimental outcome will occur.
• The best probability estimates often are obtained by combining the estimates
from the classical or relative frequency approach with the subjective estimate.
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Subjective Method (2 of 2)
Example: Bradley Investments
An analyst made the following probability estimates.
Experimental Outcome Net Gain or Loss Probability
(10,8) $18,000 Gain 0.20
(10, –2) $8,000 Gain 0.08
(5, 8) $13,000 Gain 0.16
(5, –2) $3,000 Gain 0.26
(0, 8) $8,000 Gain 0.10
(0, –2) $2,000 Loss 0.12
(–20, 8) $12,000 Loss 0.02
(–20, –2) $22,000 Loss 0.06
Empty cell Empty cell Sum equals 1.00
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Events and Their Probabilities (1 of 2)
• An event is a collection of sample points.
• The probability of any event is equal to the sum of the probabilities of the sample
points in the event.
• If we can identify all the sample points of an experiment and assign a probability
to each, we can compute the probability of an event.
Event M = Markley Oil is Profitable
M = { (10, 8), (10, –2), (5, 8), (5, –2) }
P(M) = P(10, 8) + P(10, –2) + P(5, 8) + P(5, –2)
= 0.20 + 0.08 + 0.16 + 0.26
= 0.70
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Events and Their Probabilities (2 of 2)
Example: Bradley Investments
Event C = Collins Mining is Profitable
C = { (10, 8), (5, 8), (0, 8), (–20, 8) }
P(C) = P(10, 8) + P(5, 8) + P(0, 8) + P(–20, 8)
= 0.20 + 0.16 + 0.10 + 0.02
= 0.48
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