Escolar Documentos
Profissional Documentos
Cultura Documentos
Session 1
Probability
Probability
Probability is
is aa numerical
numerical measure
measure of
of the
the likelihood
likelihood
that
that an
an event
event will
will occur.
occur.
Probability
Probability values
values are
are always
always assigned
assigned on
on aa scale
scale
from
from 0
0 to
to 1.
1.
A
A probability
probability near
near zero
zero indicates
indicates an
an event
event is
is quite
quite
unlikely
unlikely to
to occur.
occur.
A
A probability
probability near
near one
one indicates
indicates an
an event
event is
is almost
almost
certain
certain to
to occur.
occur.
0
The event
is very
unlikely
to occur.
.
5
The occurrence
of the event is
just as likely as
it is unlikely.
1
The event
is almost
certain
to occur.
Statistical Experiments
In
In statistics,
statistics, the
the notion
notion of
of an
an experiment
experiment differs
differs
somewhat
somewhat from
from that
that of
of an
an experiment
experiment in
in the
the
physical
physical sciences.
sciences.
In
In statistical
statistical experiments,
experiments, probability
probability determines
determines
outcomes.
outcomes.
Even
Even though
though the
the experiment
experiment is
is repeated
repeated in
in exactly
exactly
the
the same
same way,
way, an
an entirely
entirely different
different outcome
outcome may
may
occur.
occur.
For
For this
this reason,
reason, statistical
statistical experiments
experiments are
are somesometimes
times called
called random
random experiments.
experiments.
Experiment Outcomes
Toss a coin
Inspection a part
Conduct a sales call
Roll a die
Play a football game
Head, tail
Defective, non-defective
Purchase, no purchase
1, 2, 3, 4, 5, 6
Win, lose, tie
Assigning Probabilities
Basic Requirements for Assigning Probabilities
1.
1. The
The probability
probability assigned
assigned to
to each
each experimental
experimental
outcome
outcome must
must be
be between
between 0
0 and
and 1,
1, inclusively.
inclusively.
0 < P(Ei) < 1 for all i
where:
Ei is the ith experimental outcome
and P(Ei) is its probability
Assigning Probabilities
Basic Requirements for Assigning Probabilities
2.
2. The
The sum
sum of
of the
the probabilities
probabilities for
for all
all experimental
experimental
outcomes
outcomes must
must equal
equal 1.
1.
P(E1) + P(E2) + . . . + P(En) = 1
where:
n is the number of experimental outcomes
Assigning Probabilities
Classical Method
Assigning probabilities based on the assumption
of equally likely outcomes
Relative Frequency Method
Assigning probabilities based on experimentation
or historical data
Subjective Method
Assigning probabilities based on judgment
Subjective Method
When economic conditions and a companys
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.
Complement of an Event
The complement of event A is defined to be the event
consisting of all sample points that are not in A.
c
The
The complement
complement of
of A
A is
is denoted
denoted by
by A
Ac..
Event A
Venn
Diagra
m
Ac
Sample
Space S
Event A
Event B
Sample
Space S
Independent Events
If
If the
the probability
probability of
of event
event A
A is
is not
not changed
changed by
by the
the
existence
existence of
of event
event B,
B, we
we would
would say
say that
that events
events A
A
and
and B
B are
are independent.
independent.