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    Bayesian Rule - Example 2

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    aman_nsu
    The document discusses how Bayesian rule can be extended to cases with more than two mutually exclusive and exhaustive events. It provides a formula to calculate the revised probability of an event occurring after observing another event. As an example, it calculates the probability that an item came from a specific factory given it was found to be defective, using the percentages produced and defective from each factory and Bayes' theorem.

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    Bayesian Rule - Example 2

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    aman_nsu
    16 views2 pages
    The document discusses how Bayesian rule can be extended to cases with more than two mutually exclusive and exhaustive events. It provides a formula to calculate the revised probability of an event occurring after observing another event. As an example, it calculates the probability that an item came from a specific factory given it was found to be defective, using the percentages produced and defective from each factory and Bayes' theorem.

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    Bayesian Rule -Example 2

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    Bayesian Rule -Example 2

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    The document discusses how Bayesian rule can be extended to cases with more than two mutually exclusive and exhaustive events. It provides a formula to calculate the revised probability of an event occurring after observing another event. As an example, it calculates the probability that an item came from a specific factory given it was found to be defective, using the percentages produced and defective from each factory and Bayes' theorem.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    16 views2 pages

    Bayesian Rule - Example 2

    Uploaded by

    aman_nsu
    The document discusses how Bayesian rule can be extended to cases with more than two mutually exclusive and exhaustive events. It provides a formula to calculate the revised probability of an event occurring after observing another event. As an example, it calculates the probability that an item came from a specific factory given it was found to be defective, using the percentages produced and defective from each factory and Bayes' theorem.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Bayesian rule can be extended to the case of more than two types of events.

    Suppose we have mutually exclusive and exhaustive events A, B, C. Also suppose


    D is such that event D can occur with A or B or C. Suppose we know P(D/A), P
    (D/B) and P(D/C). After an experiment it is found that D occurred. Can we use this
    information to revise the probabilities of A, B and C? Yes by using the extended
    version of the Bayesian rule. I will show the formula below:
    P(A/D) can be found by
    ( ) (

    ) / ( ) (

    ( ) (

    ( ) (

    Similarly we can find the revised probabilities of B or C.


    Example 2 of Bayesian Rule: An item is produced in 3 different factories, C1, C2,
    C3. The proportions produced in the 3 factories and the proportions defective in
    each are as follows:
    Factory

    % produced

    % defective

    C1

    50

    C2

    30

    4
    An item is purchased and found to be defective. Let us call this event D. After this
    result, what is the probability that it was from factory C1?
    C3

    20

    Answer: The probability asked by the question (the posterior probability after the
    result of defective is known) can be indicated in symbols as P(C1/D). Note that the
    last column shows the conditional probability of defective for each factory. For
    example, P(D/C1) is 0.02 or 2 percent. Thus we see that the question asks a reverse,
    conditionality to what is given. Clearly this is a case of Bayes Theorem.
    The probability of a defective P(D) before the result is known can be found from
    the Law of Total probability or the rule of addition for mutually exclusive
    events. The defective item can come from any of the factories. Therefore, its total
    probability is the sum of the joint probabilities with the three factories.
    The joint probability of D with C1 is P(D and C1) = P(C1)*P(D/C1) = 0.5*0.02 =
    0.01;

    The joint probability of D with C2 is P(D and C2) = P(C2)*P(D/C2) = 0.3*0.03 =


    0.009; and
    The joint probability of D with C1 is P(D and C1) = P(C1)*P(D/C1) = 0.2*0.04 =
    0.008. Therefore, P(D) = 0.010 + 0.009 + 0.008 = 0.027
    Thus, using the Bayes Theorem (which is simply the application of conditional
    probability rule discussed above)
    P(C1/D) = [P(D/C1)*P(C1)]/P(D) = [0.02*0.5]/0.027 = 0.37.
    Before we found that the item was defective, the probability of the first factory was
    50%. After we know that the item is defective, it drops to 37% because the first
    factory has relatively the lowest rate of producing defective products.

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