Basic Terminology:-

• Trial & Event

• Exhaustive number of cases
• Favorable number of cases
• Mutually Exclusive events
• Independent events
• Classical Method:-

Assigning probabilities based on the assumption of

equally likely outcomes.

favorable no. of cases

probability of an event =
Exhaustive no. of cases
• Relative Frequency Method:-
Assigning probabilities based on
experimentation or historical data.
Probability rules:-

1. The case where one event or another

event occur.
2. The case where two or more events will
both occur.
Ex:-Union shop steward Peter has drafted a set of wage and benefit
demands to be presented to management. To get an idea of
worker support for the package, he randomly polls the two largest
groups of workers at his plant, The machinists (M) and the
inspectors (I). He polls 30 of each group with the following results:
Opinion of package M I
Strongly support 9 10
Mildly support 11 3
Undecided 2 2
Mildly oppose 4 8
Strongly oppose 4 7
i. What is the pbt that a machinist randomly selected from the polled
group mildly supports the package?
ii. What is the pbt that an inspector randomly selected from the
polled group is undecided about the package?
iii. What is the pbt that a worker (machinist or inspector) randomly
selected from the polled group strongly or mildly supports the
package?
iv. What types of pbts are these?
Addition rule:

If A and B are any two events and are

disjoint then
P(A or B)= The Pbt of either A or B
happening
= P(A)+P(B)
If A and B are any two events and are not
disjoint then
P(A or B)= The Pbt of either A or B
happening
= P(A)+P(B)-P(AB)
P(A) is that Pbt of A happening
P(B) is that Pbt of B happening
P(AB) is that Pbt of A and B happening
together
1. The employees of a certain company have elected 5 of their number to
represent them on the employee-management productivity council. Profiles
of the 5 are as follows:
Gender Age
1. Male 30
2. Male 32
3. Female 45
4. Female 20
5. Male 40

This group decides to elect a spokesperson by drawing a name from a chit.

What is the Pbt the spokesperson will be either female or over 35?

2. An inspector of the Alaska pipeline has the task of comparing the reliability
of two pumping stations. Each station is susceptible to two kinds of failure:
pump failure and leakage. When either (or both) occur, the station must be
shut down. The data at hand indicate that the following pbts prevail:
Station P (Pump failure) P (Leakage) P (Both)
1 0.07 0.10 0
2 0.09 0.12 0.06
Which station has the higher pbt of being shut down?
Pbts under conditions of Statistical
independence:

1. Marginal / Unconditional pbts

2. Joint pbts
3. Conditional pbts
If A & B are two independent events then the
Joint pbt of A and B is given by
P(A and B)=P(AB)=P(A)P(B)

If A & B are two independent events then the

conditional pbt of B given that A is given by
P(B/A)=P(B)
Similarly the conditional pbt of A given that
B is given by P(A/B)=P(A)
1.A bag contains 32 marbles:4 are red, 9
are black, 12 are blue, 6 are yellow, and 1
is purple. Marbles are drawn one at a time
with replacement. What is the pbt that
i. The second marble is yellow given
the first was yellow?
ii. The second marble is yellow given
the first was black?
iii. The third marble is purple given both
the first and second were purple?
2. The health dept. routinely conducts two independent
inspections of each restaurant, with the restaurant
passing only if both inspectors pass it. Inspector A is
very experienced, and hence passes only 2% of
restaurants that actually do have health code violations.
Inspector B is less experienced and passes 7% of
restaurants with violations.
What is the pbt that
a). Inspector A passes a restaurant with a violation,
given that inspector B has found a violation?
b). Inspector B passes a restaurant with a violation,
given that inspector A passes it?
c). A restaurant with a violation is passed by the
health department?
Pbts under conditions of Statistical dependence:

1. Conditional pbts:
If A and B are any two events then the
conditional pbt of B given that already the
event A happened is given by
P(AB)
P(B/A) =
P(A)
Similarly the conditional pbt of A given that
already the event B happened is given by
P(AB)
P(A/B) =
P(B)
2. Joint pbts: (Multiplication law of pbt)
If A and B are any two events then

P(A and B)=P(AB)=P(A)P(B/A)

=P(B)P(A/B)
 Let a box contains 10 balls distributed as below
• Three are colored and dotted
• One is colored and striped
• Two are gray and dotted
• Four are gray and striped
a) Suppose a ball drawn from the box and found to
be colored. What is the pbt that it is dotted?
b) Suppose a ball drawn from the box and found to
be colored. What is the pbt that it is striped?
c) Suppose a ball drawn from the box and found to
be gray. What is the pbt that it is dotted?
d) Suppose a ball drawn from the box and found to
be gray. What is the pbt that it is striped?
 d) Suppose a ball is drawn from the
box, find the pbt that it is colored and
sriped?
e) Suppose a ball is drawn from the
box, find the pbt that it is colored?
1.Two events A and B are statistically
dependent. If P(A)=0.39, P(B)=0.21and
P(A or B)=0.47, find the pbt that
a). Neither A nor B will occur
b). Both A & B will occur
c). B will occur, given that A has
occurred.
d). A will occur, given that B has
occurred
2. During a study of auto accidents, the
Highway safety found that 60% of all
accidents occur at night. 52% are alcohol-
related, and 37% occur at night and are
alcohol- related.
a) What is the pbt that an accident was
alcohol-related, given that it occurred at
night?
b) What is the pbt that an accident
occurred at night, given that it was
alcohol-related?
3. The university’s library has been randomly surveying patrons over
the last month to see who is using the library and what services they
have been using. Patrons are classified as undergraduate, graduate,
or faculty. Services are classified as reference, periodicals, or books.
The data for 350 people are given below. Assume a patron uses only
one service per visit.

Patron Reference Periodicals Books

Undergraduate 44 26 72
Graduate 24 61 20
Faculty 16 69 18

Find the pbt that a randomly selected chosen patron

a) Is a graduate student
b) Visited the periodicals section, given that the patron is a
graduate
c) Is a faculty member, given a reference section visit.
d) Is an undergraduate who visited the book section.
4. The southeast regional manager of General
Express, a private parcel – delivery firm, is
worried about the likelihood of strikes by some of
his employees. He has learned that the chance
of a strike by his pilots is 0.75 and the chance of
a strike by his drivers is 0.65. Further, he knows
that if the drivers strike , there is a 90% chance
that the pilots will strike in sympathy.
a) What is the pbt of both group’s striking?
b) If the pilots strike, what is the pbt that the
drivers will strike in sympathy?
Posterior probabilities or Bayes’ theorem:-

• Often we begin probability analysis with initial or prior

probabilities.
• Then, from a sample, special report, or a product test we
obtain some additional information.
• Given this information, we calculate revised or posterior
probabilities.
• Bayes’ theorem provides the means for revising the prior
probabilities.

Application
Prior New Posterior
of Bayes’
Probabilities Information Probabilities
Theorem
1.In a bolt factory machines A, B and C
manufactures respectively 25%,35% and
40% of the total output. Of their output 5%,
4%,2% are defective bolts. A bolt is drawn
from the output and is found to be
defective. What is the chance that it was
produced by machine B?
Let
E1 be the event of drawing a bolt at
random manufactured by the machine A
E2 be the event of drawing a bolt at
random manufactured by the machine B
E3 be the event of drawing a bolt at
random manufactured by the machine C
Let X be the event of its being defective
Prior pbts:
P(E1)=25%
P(E2)=35%
P(E3)=40%

Likelihood pbts:
P(X/E1)=5%
P(X/E2)=4%
P(X/E3)=2%
Additional information:
A defective bolt was selected from the
output.
To find the chance that it was produced by
machine B we apply the Bayes’ theotem and is
given by

P( Ei )P( X | Ei )
P( Ei | X ) =
P( E1 )P( X | E1 ) + P( E2 )P( X | E2 ) + ... + P( En )P( X | En )
 P(E 2 )P(X | E2 )
P(E | X)=
P(E 1 )P(X | E1 )+ P(E 2 )P(X | E 2 )+ P(E )P(X | E3 )
2
3

(0.35)(0.04) 140 28
= = = = 0.4058
(0.25)(0.05) + (0.35)(0.04) + (0.40)(0.02) 345 69
Events Prior Conditional Joint Probabilities Posterior
Ei Probabilities P(Ei) Probabilities P(X|Ei) P(Ei ∩ X) Probabilities P(Ei |
X)

E1 0.25 0.05 0.0125 0.3623

E2 0.35 0.04 0.014 0.4058

E3 0.40 0.02 0.008 0.2319

Ex: A proposed shopping center will
provide strong competition for downtown
businesses like John Clothiers. If the
shopping center is built, the owner of John
Clothiers feels it would be best to relocate.
The shopping center cannot be built
unless a zoning change is approved by the
town council. The planning board must first
make a recommendation, for or against the
zoning change, to the council.
Let:
A1 = town council approves the zoning
change
A2 = town council disapproves the
Zoning change
• Prior Probabilities
Using subjective judgment: P(A1) = 0.7,
P(A2) = 0.3
• New Information
The planning board has recommended against
the zoning change. Let B denote the event of a
negative recommendation by the planning board.
Given that B has occurred, should John Clothiers
revise the probabilities that the town council will
approve or disapprove the zoning change?
• Conditional Probabilities
Past history with the planning board and the town
council indicates the following:
P(B|A1) = 0.2 P(B|A2) = 0.9
• To find the posterior probability that event Ai will
occur given that event B has occurred we apply
Bayes’ theorem.
P( Ai ) P( B| Ai )
P ( Ai | B ) =
P( A1 ) P( B| A1 ) + P( A2 )P( B| A2 ) + ...+ P( An ) P( B| An )

• Bayes’ theorem is applicable when the events for

which we want to compute posterior probabilities
are mutually exclusive and their union is the entire
sample space.
• Posterior Probabilities
Given the planning board’s recommendation not to
approve the zoning change, we revise the prior
probabilities as follows.
P ( A1 ) P ( B| A1 ) (. 7 )(. 2 )
P ( A1| B ) = =
P ( A1 ) P ( B| A1 ) + P ( A2 ) P ( B| A2 ) (. 7 )(. 2 ) + (. 3)(. 9)
= 0.34
• Conclusion
The planning board’s recommendation is good
news for John Clothiers. The posterior probability
of the town council approving the zoning change is
0.34 versus a prior probability of 0.70
Tabular Approach:

Events Prior Conditional Joint Probabilities Posterior

Ai Probabilities Probabilities P(B|Ai) P(Ai ∩ B) Probabilities P(Ai
P(Ai) |B)

A1 0.7 0.2 0.14 0.3415

A2 0.3 0.9 0.27 0.6585

1. A doctor has decided to prescribe two new
drugs to 200 heart patients as follows: 50 get
drug A, 50 get drug B, 100 get both. The 200
patients were chosen so that each had an 80%
chance of having a heart attack if given neither
drug. Drug A reduces the chance of a heart
attack by 35%, drug B reduces the same by
20%, and the two drugs, when taken together,
work independently. If a randomly selected
patient in the program has a heart attack, what is
the pbt that the patient was given both drugs?
Case Let:
A state Democratic official has decided that changes in the state unemployment
rate will have a major effect on his party’s chance of gaining or losing seats
in the state senate. He has determined that if unemployment rises by 2% or
more, the respective pbts of losing more than 10 seats, losing 6 to 10 seats,
gaining or losing 5 or less seats, gaining 6 to 10 seats , and gaining more
than 10 seats are 0.25, 0.35, 0.15, 0.15, and 0.10 . If unemployment
changes by less than 2% , the respective pbts of losing more than 10 seats,
losing 6 to 10 seats, gaining or losing 5 or less seats, gaining 6 to 10 seats ,
and gaining more than 10 seats are 0.10, 0.10, 0.15, 0.35, and 0.30. If
unemployment falls by 2% or more, the respective pbts of losing more than
10 seats, losing 6 to 10 seats, gaining or losing 5 or less seats, gaining 6 to
10 seats , and gaining more than 10 seats are 0.05, 0.10, 0.10, 0.40, and
0.35. Currently this official believes that unemployment will by 2% or more
with pbt 0.25, change by less than 2% with pbt 0.45, and fall by 2% or more
with pbt 0.30.
a) If the Democrats gained seven seats, what is the pbt that unemployment
fell by 2% or more?
b) If the Democrats lost one lost seat, what is the pbt that unemployment
changed by less than 2%?