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Basic Business Statistics
11th Edition
Chapter 4 Basic Probability
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.
Chap 4-1
Learning Objectives
In this chapter, you learn: Basic probability concepts Conditional probability To use Bayes’ Theorem to revise probabilities Various counting rules
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc..
Chap 4-2
Basic Probability Concepts
Probability – the chance that an uncertain event will occur (always between 0 and 1) Impossible Event – an event that has no chance of occurring (probability = 0) Certain Event – an event that is sure to occur (probability = 1)
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc..
Chap 4-3
Assessing Probability
There are three approaches to assessing the probability of an uncertain event:
1. a priori -- based on prior knowledge of the process
probability of occurrence =
Assuming all outcomes are equally likely
X number of ways the event can occur = T total number of elementary outcomes number of ways the event can occur total number of elementary outcomes
2. empirical probability
probability of occurrence =
3. subjective probability based on a combination of an individual’s past experience, personal opinion, and analysis of a particular situation
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 4-4
Example of a priori probability
Find the probability of selecting a face card (Jack, Queen, or King) from a standard deck of 52 cards.
Probability of Face Card =
number of face cards X = T total number of cards
X 12 face cards 3 = = T 52 total cards 13
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc..
Chap 4-5
Example of empirical probability
Find the probability of selecting a male taking statistics from the population described in the following table:
Taking Stats Male Female Total 84 76 160 Not Taking Stats 145 134 279 Total 229 210 439
Probability of male taking stats =...