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Business Maths Chapter 2

The document introduces permutations and combinations. It defines permutations as arrangements of objects where order matters, and combinations as arrangements where order does not matter. The factorial function is used to calculate the number of permutations. The multiplication principle states that if one operation can be done in m ways and a second in n ways, both can be done in m×n ways. Combinations are calculated using the binomial coefficient formula of n!/(n-r)!r!. Several examples demonstrate calculating permutations and combinations in different scenarios like arranging letters, selecting committees, and ranking options.

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0% found this document useful (0 votes)
190 views

Business Maths Chapter 2

The document introduces permutations and combinations. It defines permutations as arrangements of objects where order matters, and combinations as arrangements where order does not matter. The factorial function is used to calculate the number of permutations. The multiplication principle states that if one operation can be done in m ways and a second in n ways, both can be done in m×n ways. Combinations are calculated using the binomial coefficient formula of n!/(n-r)!r!. Several examples demonstrate calculating permutations and combinations in different scenarios like arranging letters, selecting committees, and ranking options.

Uploaded by

鄭仲抗
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CHAPTER 2

INTRODUCTION TO PROBABILITY AND STATISTICS

2.1 PERMUTATIONS AND COMBINATIONS


2.1.1 Permutations of a Set of Objects

Permutations is the process of arranging. Thus, the number of permutation refers to the number of
arrangements. The factorial function is used to find the number of arrangements for objects. For 𝑛
different items, there are 𝑛! arrangements.

For 𝑛 ≥ 1, 𝑛! = (𝑛)(𝑛 − 1)(𝑛 − 2) … (3)(2)(1)  represent the products of all integers


from 𝑛 to 1.
By convention,
for 𝑛 = 0, 0! = 1  How many ways are there to count an empty set, there is just one way to do
it.

Example 1:
Evaluate
(a) 3! = (3)(2)(1) = 6 (b) 4! (4)(3)(2)(1)
= = 24
0! 1

The Multiplication Principle


If an operation can be carried out in 𝑚 ways, a second operation in 𝑛 ways, then there are 𝑚 × 𝑛
ways of carrying out both the consecutive operations. If the first operation can be performed in 𝑛1
ways, the second and third can be performed in 𝑛2 and 𝑛3 ways respectively, and so forth, then the
sequence of 𝑘 operations can be performed in 𝑛1 × 𝑛2 × 𝑛3 × … 𝑛𝑘 ways.

Example 2: If there are three different routes from X to Y and five different routes from Y to Z,
determine how many routes are there from X to Z.

Solution:
Number of routes = 3 × 5 = 15

2.1.2 Permutations of 𝒏 Different Objects

If there are 𝑛 distinct objects, then the permutations of 𝑛 objects means the number of arrangements
possible for the set of objects. The number of permutations of 𝑛 objects = 𝑛!
i.e.
n
𝑃𝑛 = 𝑛!
Example 3:
There are three letters, A, B, and C. In how many ways can the letters be arranged?

Solution:

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 1|Page


The number of arrangements 3𝑃3 = 3! = 6 because the six ways in which the three letters can
be arranged are: ABC, ACB, BAC, BCA, CAB, CBA.

Exercise 1:
Five members of a social organization have volunteered to serve as officers to take up positions as
President, Assistant President, Treasurer, Assistant Treasurer and Secretary. In how many ways
can the five members assume the position?

2.1.3 Permutation of 𝒓 Objects from 𝒏 Different Objects

Definition for PERMUTATION:


An ordered selection of r objects, without repetition, taken from n distinct objects is called a
permutation of n objects taken r at a time. The number of such permutations is denoted
𝑛𝑃𝑟 .

The number of permutations of 𝑛 distinct objects taken at 𝑟 at a time is


n 𝑛!
𝑃𝑟 = (𝑛−𝑟)! , (𝑟 ≤ 𝑛)
Example 4:
How many ways are there to arrange five students from a group of ten students in a row?

Solution:
10 10! 10!
𝑃5 = (10−5)! = = 30240
5!

2.1.4 Permutations of 𝒏 Objects Comprising of 𝒓𝟏 Identical Objects, 𝒓𝟐 Identical Objects, ..,


𝒓𝒌 Identical Objects

If there are a total of 𝑛 objects with 𝑟1 alike, 𝑟2 alike, …, 𝑟𝑘 alike, the number of permutations of all
objects is
𝑛!
𝑟1 ! 𝑟2 ! … 𝑟𝑘 !
Example 5:
In how many ways can 3 red, 4 blue and 2 green pens can be distributed among nine students
seated in a row if each students receives one pen?

Solution:
Number of possible allocations,
9!
= = 1260
4! 3! 2!

Exercise 2:
There are 10 students out of whom six are females. How many possible arrangements are there if
(a) They are arranged in a row?
(b) Males always sit on one side and females on the other side?

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 2|Page


2.1.5 Combination of a Set of 𝒏 distinct Objects

When 𝑟 objects are taken out from among 𝑛 distinct objects, where order is not taken into
consideration, then it is called the combination of 𝑛 objects taken 𝑟 at a time, and the designation is
n 𝑛!
𝐶𝑟 = (𝑛−𝑟)!𝑟!
The difference between permutations and combinations is permutations are used when order is
important while combinations are used when order is not important.

Example 6:
You have five spaces left for stamps in your stamp book and you have eight different stamps. How
many different selections are there?

Solution:
It is a combination of 5 items from 8 items, thus there are 8𝐶5 = 56 combinations.

Example 7:
In how many ways can a committee of 6 be chosen from 5 teachers and 4 students if:
(a) All are equally eligible?
(b) The committee must include three teachers and three students?

Solution:
9
(a) 𝐶6 = 84
5
(b) 𝐶3 ×4𝐶3 = 40

(MORE EXAMPLES)
Example 8. Travel Routes

Two roads connect cities A and B, four connect B and C, and five connect C and D. To drive from
A, to B, to C, and then to city D, how many different routes are possible?

Solution: The total number of routes is 2 ∙ 4 ∙ 5 = 40.

Example 9. Coin tosses and roll of a die

When a coin is tossed, a head (H) or a tail (T) may show. If a die is rolled, a 1, 2, 3, 4, 5, or 6 may
show. Suppose a coin is tossed twice and then a die is rolled, and the result is noted (such as H on
first toss, T on second, and 4 on roll of die). How many different results can occur?

Solution: The number of different results for the procedure is 2 ∙ 2 ∙ 6 = 24

Example 10. Answering a quiz

In how many different ways can quiz be answered under each of the following conditions?

a. The quiz consists of three multiple-choice questions with four choices for each.

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 3|Page


Solution: The number of ways to answer the quiz is 4 ∙ 4 ∙ 4 = 43 = 64.

b. The quiz consists of three multiple-choice questions (with four choices for each) and five true-
false questions.

Solution: The number of ways the entire quiz can be answered is (4 ∙ 4 ∙ 4)(2 ∙ 2 ∙ 2 ∙ 2 ∙ 2) = 43 ∙
25 = 2048.

Example 11. Letter arrangements

From the five letters A, B, C, D and E, how many three-letter horizontal arrangements (called
“words”) are possible if no letter can be repeated? (A “word” need not make sense.) For example,
BDE and DEB are two acceptable words, but CAC is not.

Solution: The total number of three-letter words is 5 ∙ 4 ∙ 3 = 60.

Example 12. Club officers

A club has 20 members. The offices of president, vice president, secretary, and treasurer are to be
filled, and no member may serve in more than one office. How many different slates of candidates
are possible?

Solution: The number of possible slates is 20𝑃4 = 20 ∙ 19 ∙ 18 ∙ 17 = 116,280.

Example 13. Political questionnaire

A politician sends a questionnaire to her constituents to determine their concerns about six important
national issues: unemployment, the environment, taxes, interest rates, national defense, and social
security. A respondent is to select four issues of personal concern and rank them by placing the
number 1, 2, 3, or 4 after each issue to indicate the degree of concern, with 1 indicating the greatest
concern and 4 the least. In how many ways can a respondent reply to the questionnaire?

Solution: The number of possible replies is 6𝑃4 = 360.

Example 14. Name of legal firm

Lawyers Smith, Jones, Jacobs, and Bell want to form a legal firm and will name it by using all four
of their last names. How many possible names are there?

Solution: The number of permutations of four names is 24.

Example 15. Comparing combinations and permutations


List all combinations and all permutations of the four letters A, B, C and D when they are taken three
at a time.

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 4|Page


Solution: There are four combinations. There are 24 permutations.

Example 16. Committee selection


If a club has 20 members, how many different four-member committees are possible?
Solution: Order is not important because, no matter how the members of a committee are arranged,
we have the same committee. Thus, we simply have to compute the number of combinations of 20
objects taken four at a time, 20𝐶4 = 4845.
There are 4845 possible committees.

Example 17. Majority decision and sum of combinations


A college promotion committee consists of five members. In how many ways can the committee
reach a majority decision in favor of a promotion?

Strategy A favorable majority decision is reached if, and only if,


exactly three members vote favorably,
or exactly four members vote favorably,
or all five members vote favorably
To determine the total number of ways to reach a favorable majority decision, we add the
number of ways that each of the preceding votes can occur.

Solution: The number of ways to reach a majority decision in favor of a promotion is 5𝐶3 + 5𝐶4 +
5𝐶5 = 10 + 5 + 1 = 16.

Example 18. Letter arrangements with and without repetition


For each of the following words, how many distinguishable permutations of the letters are possible?
a) APOLLO
6!
Solution: The number of permutations is 1!1!2!2! = 180.

b) GERM

Solution: The number of permutations is 4𝐶4 = 4! = 24.

Example 19. Name of legal firm


A group of four lawyers, Smith, Jones, Smith and Bell (the Smiths are cousins), want to form a legal
firm and will name it by using all of their last names. How many possible names exist?
4!
Solution: The number of distinguishable names is 2!1!1! = 12.

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 5|Page


2.2 SAMPLE SPACES AND EVENTS

Probability as a general concept that can be defined as the chance of an event occurring. Most of
us are familiar with probability from playing or observing games of chance, such as football matches,
card games, slot machines or lotteries.

Probability theory is used in various fields for decision making such as investments, insurance and
weather forecasting. Probability theory allows us to measure such uncertainty.

2.2.1 Some definitions

A random experiment is an action or process that leads to one of several possible outcomes. An
outcome of an experiment is an observation or measurement from the implementation of the
experiment. The followings are examples of random experiments and its outcome.

Experiment Outcomes
a) Toss a coin Head, Tail
b) Roll a die 1, 2, 3, 4, 5, 6
c) Toss two coins Head-Head, Head-Tail, Tail-Head, Tail-Tail
d) Record the condition of a computer Good, defective
part produced

It is important to note that the list of outcomes must be exhaustive and mutually exclusive.
Exhaustive means that all possible outcomes must be included and mutually exclusive or disjoint
means no two outcomes can occur on the same time.

For example, when a coin is flipped, we either get head or tail. These outcomes are exhaustive and
mutually exclusive.

A sample space of a random experiment is a list of all possible outcomes of the experiment. The
sample space is usually denoted as 𝑆. The outcomes must be exhaustive and mutually exclusive.

The sample space for an experiment can be illustrated by;


(a) Venn Diagram
(b) Tree Diagram
(c) Using set notation

2.2.2 Events

An event is a collection or one more outcomes from a sample space. In other words, an event is a
subset of the sample space.

Example 1:
If a die is rolled once, the event of getting odd numbers is {1, 3, 5}. {1, 3, 5} is a subset of the sample
space, S = {1, 2, 3, 4, 5, 6}.

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 6|Page


Union of events: The union of events A and B consists of all elements which are in A or B or both. It
is denoted by 𝐴 ∪ 𝐵 ,

Intersection events: The intersection of events A and B is the event that occurs when both A and B
occur. It is denoted by 𝐴 ∩ 𝐵. The probability of the intersection is called the joint probability.

Complementary event: The complement of event A with respect to S is the subset of all elements of
S that are not in A, denoted as A’ or 𝐴𝐶 . Thus, P(A’) = 1 – P(A).

Mutually Exclusive Events: Two events A and B are mutual exclusive or disjoint if 𝐴 ∩ 𝐵 = ∅, where
∅ denotes the empty set. This means that events A and B have no common element, or events A
and B cannot occur together.

Example 2:
What are the outcomes and sample space for the following experiments?
(a) Tossing a coin once

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 7|Page


(b) Tossing a coin twice
(c) Rolling a die once

Solution:
(a) Outcomes: H, T where H = Head, T = Tail, S = {H,T}
(b) Outcomes: HH, HT, TH, TT, S = {HH, HT, TH, TT}
(c) Outcomes: 1, 2, 3, 4, 5, 6, S = {1, 2, 3, 4, 5, 6}

Example 3. Sample space: three tosses of a coin


A coin is tossed three times, and the result of each toss is observed. Describe a sample space and
determine the number of sample points.
Solution: A sample space is S={HHH, HHT, HTH, HTT, THH, THT, TTH, TTT}.
The total number of sample points is 2 ∙ 2 ∙ 2 = 8.

Example 4. Sample space: jelly beans in a bag


A bag contains four jelly beans: one red, one pink, one black, and one white.
a) A jelly bean is withdrawn at random, its color is noted, and it is put back in the bag. Then a jelly
bean is again randomly withdrawn and its color is noted. Describe a sample space and determine
the number of sample points.
Solution: The number of sample points is 16.

b) Determine the number of sample points in the sample space if two jelly beans are selected in
succession without replacement and the colors are noted.
Solution: The number of sample points is 12.

Example 5. Sample space: roll of two dice


A pair of dice is rolled once, and for each die, the number that turns up is observed. Describe a
sample space.
Solution: The number of sample points is 36.

Example 6: Events
A coin is tossed three times, and the result of each toss is noted. The usual sample space is {HHH,
HHT, HTH, HTT, THH, THT, TTH, TTT}. Determine the following events.
a) E={one head and two tails}
b) F={at least two heads}
c) G={all heads}

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 8|Page


d) I={head on first toss}

Example 7. Complement, union, intersection


Given the usual sample space 𝑆 = {1,2,3,4,5,6} for the rolling of a die, let E, F, and G be the events
𝐸 = {1,3,5}, 𝐹 = {3,4,5,6} and 𝐺 = {1}. Determine each of the following events.
a) 𝐸′
b) 𝐸 ∪ 𝐹
c) 𝐸 ∩ 𝐹
d) 𝐹 ∩ 𝐺
e) 𝐸 ∪ 𝐸′
f) 𝐸 ∩ 𝐸′

2.3 PROBABILITY

2.3.1 Definition of Probability and Some Basic Laws of Probability

Probability is a measurement of the likelihood that an event will occur. In any random experiment,
there is always an uncertainty as to whether a particular event will or will not occur.

It is convenient to assign a number between 0 and 1 to represent the probability of the occurrence
of the event. An event M that cannot occur has zero probability; such an event is called an impossible
event, that is P(M) = 0. An event C that is certain to occur has a probability equals to 1 and is called
a sure event, that is P(C) = 1.

In general, the probability that an event A will occur is denoted by P(A) and is defined as
n(A)
P(A) =
n(S)

where n(A): the number of possible outcomes in A


n(S): total number of outcomes in the sample space, S.

Equiprobable spaces (Definition: A sample space S is called an equiprobable space if and only if all
1
the simple events are equally likely to occur, (𝑠𝑖 ) = 𝑁 )

Basic Laws of Probability


There are four basic probability laws. These laws are helpful in solving probability problems
(a) 0 ≤ P(A) ≤ 1
(b) If A is an impossible event, P(A) = 0.
(c) If A is a sure event, P(A) = 1
(d) If A’ is the complementary event of A, P(A’) = 1 – P(A)

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 9|Page


Example 1:
(a) What is the probability that 4 will not appear when a fair die is tossed?
(b) The probability that a student is late for as school is ¼ for each day. Find the probability that
the student is not late for school.

Solution:
(a) n(S) = 6. If E is the event of getting 4, then n(E) = 1.
1
P(E) =
6
By the complement rule, the probability that 4 will not appear is
1 5
P(E′) = 1 − =
6 6
(b) Let L = late for school
1 3
P(Not late) = P(L’) = 1 − =
4 4

2.3.2 Combined Probability Rule


2.3.2.1 Mutually Exclusive Events and Exhaustive Events

Events that cannot occur together called mutually exclusive events. In set notation, if A and B are
exclusive events in the sampling space, then 𝐴 ∩ 𝐵 = { }. This situation is shown by a Venn
diagram.

When there are more than two events involved, all events are mutually exclusive only if every pair
of the events is exclusive. In set notation, if A, B and C are exclusive events in the sampling space,
then 𝐴 ∩ 𝐵 = { }, 𝐴 ∩ 𝐶 = { }, 𝐵 ∩ 𝐶 = { }, and 𝐴 ∩ 𝐵 ∩ 𝐶 = { }. This situation is
shown in Venn diagram.

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 10 | P a g e


The events A1 , A2 , … , Ak are exhaustive if A1 ∪ A2 ∪ A3 ∪ … ∪ Ak = S. In Venn diagram
representation,

This implies that P(A1 ∪ A2 ∪ A3 ∪ … ∪ Ak ) = 1.

2.3.2.2 Compound Probabilities and Probability of Mutually Exclusive Events

The probability that event A or event B or both occur is


P(A or B) = P(A ∪ B) = P(A) + P(B) − P(A ∩ B)

Generally, if A, B and C are three events, then


P(A or B or C) = P(A ∪ B ∪ C)
= P(A) + P(B) + P(C) − P(A ∩ B) − P(B ∩ C) − P(C ∩ A) + P(A ∩ B ∩ C)

When events A and B mutually exclusive (A ∩ B = ∅), we have


P(A or B) = P(A ∪ B) = P(A) + P(B)

When more than two events are mutually exclusive,


P(A or B or C) = P(A ∪ B ∪ C) = P(A) + P(B) + P(C) + ⋯

Example 2: The probabilities of event A and B are 𝑃 (𝐴) = 3/5 and 𝑃 (𝐵 ) = 3/4. If 𝑃(𝐴 ∪ 𝐵 ) =
9/10, determine whether event A and event B are mutually exclusive.

Solution:
If events A and B are mutually exclusive, then 𝑃 (𝐴 ∪ 𝐵 ) = 𝑃(𝐴) + 𝑃(𝐵)
Given that,
9
𝑃 (𝐴 ∪ 𝐵 ) = ,
10
3 3 27 9
𝑃 (𝐴 ) + 𝑃 ( 𝐵 ) = + = ≠
5 4 20 10
Thus, the two events are not mutually exclusive.

Example 3. Coin tossing


Two fair coins are tossed. Determine the probability that

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 11 | P a g e


a) two heads occur
#(𝐸) 1
𝑃(𝐸) = =
#(𝑆) 4
b) at least one head occurs
#(𝐹) 3
𝑃(𝐹) = =
#(𝑆) 4
Example 4. Selecting a subcommittee
From a committee of three males and four females, a subcommittee of four is to be randomly
selected. Find the probability that it consists of two males and two females.

3𝐶2 ∙ 4𝐶2 18
𝑃(𝑡wo males and two females) = =
7𝐶4
35

Example 5. Quality control


From a production run of 5000 light bulbs, 2% of which are defective, 1 bulb is selected at random.
What is the probability that the bulb is defective? What is the probability that it is not defective?
𝑃(𝐸 ′ ) = 1 − 𝑃(𝐸) = 1 − 0.02 = 0.98

Example 6. Dice
A pair of well-balanced dice is rolled, and the number on each die is noted. Determine the probability
that the sum of the numbers that turns up is
1
(a) 7 Answer:
6
2
(b) 7 or 11 Answer: 9
11
(c) greater than 3 Answer: 12

2.4 CONDITIONAL PROBABILITY AND STOCHASTIC PROCESSES

We frequently need to know how two events are related. In particular, we would like to know the
probability of one event given the occurrence of another related event. We call it as conditional
probability.

2.4.1 Conditional Events


When the occurrence of an event is related to the condition of another event happening, then the
event is a conditional event. If an event B depends on the occurrence of an event A, it is written as
B|A.

Conditional probability is the probability that an event will occur given that another event has already
occurred. If 𝐴 and 𝐵 are two events, then the conditional probability of 𝐴 given 𝐵 is written as
𝑃(𝐴|𝐵)

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 12 | P a g e


and is read as “the probability of A given that B has already occurred.”

Since event B is known to have occurred, it becomes the new sample space replacing the original
S. From this, we led to the definition
𝑃(𝐴 ∩ 𝐵)
𝑃(𝐴|𝐵) = provided 𝑃(𝐵) ≠ 0.
𝑃(𝐵)
Likewise, the probability of B given that A has already occurred is given by
𝑃(𝐴 ∩ 𝐵)
𝑃 (𝐵 | 𝐴 ) = provided 𝑃(𝐴) ≠ 0.
𝑃(𝐴)
From the formula,
(a) The joint probability of events A and B is
𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴|𝐵) ∙ 𝑃(𝐵)
or
𝑃(𝐵 ∩ 𝐴) = 𝑃(𝐵|𝐴) ∙ 𝑃(𝐴)
(b) If A and B are mutually exclusive events, then 𝑃 (𝐴 ∩ 𝐵 ) = 0. Thus,
𝑃 (𝐴 ∩ 𝐵 ) = 𝑃 (𝐴 | 𝐵 ) ∙ 𝑃 (𝐵 ) = 0
′ ′
(c) If 𝐴 ∪ 𝐴 = 𝑆, 𝐴 and 𝐴 are mutually exclusive, then
𝑃(𝑆|𝐵) = 𝑃(𝐴 ∪ 𝐴′ |𝐵) = 𝑃(𝐴|𝐵) + 𝑃(𝐴′ |𝐵)
(d) For any event B,
𝑃(𝑆 ∩ 𝐵) 𝑃(𝐵)
𝑃(𝑆|𝐵) = = =1
𝑃(𝐵) 𝑃(𝐵)
(e) 𝑃(𝐴′ |𝐵) = 1 − 𝑃(𝐴|𝐵)
(f) For complementary events, consider that 𝐵 = (𝐵 ∩ 𝐴) ∪ (𝐵 ∩ 𝐴′ ) as shown in the following
figure.
𝑃(𝐵) = 𝑃(𝐵 ∩ 𝐴) + 𝑃(𝐵 ∩ 𝐴′ ) = 𝑃(𝐵|𝐴) ∙ 𝑃(𝐴) + 𝑃(𝐵 |𝐴′ ) ∙ 𝑃(𝐴′ )

Example 1. Jelly beans in a bag


A bag contains two blue jelly beans (say, 𝐵1 and 𝐵2 ) and two white jelly beans (𝑊1 and 𝑊2 ). If two
jelly beans are randomly taken from the bag, without replacement, find the probability that the second
2
jelly bean taken is white, given that the first one is blue. Answer: 𝑃(𝑊|𝐵) = 3

Example 2. Survey
In a survey of 150 people, each person was asked his or her marital status and opinion about floating
a bond issue to build a community swimming pool. The results are summarized in table below. If
one of these persons is randomly selected, find each of the following conditional probabilities.

Favor (F) Oppose (F’) Total


Married (M) 60 20 80
Single (M’) 40 30 70
Total 100 50 150

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 13 | P a g e


a) The probability that the person favors the bond issue, given that the person is married.
3
𝑃(𝐹|𝑀) =
4
b) The probability that the person is married, given that the person favors the bond issue.
3
𝑃(𝑀|𝐹) =
5

Example 3. Quality control


After the initial production run of a new style of steel desk, a quality control technician found that
40% of the desks had an alignment problem and 10% had both a defective paint job and an
alignment problem, what is the probability that it also has a defective paint job?
1
Answer: 𝑃(𝐷|𝐴) =
4

Example 4. Genders of offspring


If a family has two children, find the probability that both are boys, given that one of the children is a
boy. Assume that a child of either gender is equally likely and that, for example, having a girl first
and a boy second is just as likely as having a boy first and a girl second.
1
Answer: 3

Example 5. Advertising
A computer hardware company placed an ad for its modem in popular computer magazine. The
company believes that the ad will be read by 32% of the magazine’s readers and that 2% of those
who read the ad will buy the modem. Assume that this is true, and find the probability that a reader
of the magazine will read the ad and buy the modem.
Answer: 0.0064

2.4.2 Stochastic processes

The general multiplication law is also called the law of compound probability. The reason is that
it is extremely useful when applied to an experiment that can be expressed as a sequence (or a
compounding) of two or more other experiments, called trials or stages. The original experiment is
called a compound experiment, and the sequence of trials is called a stochastic process. The
probabilities of the events associated with each trial (beyond the first) could depend on what events
occurred in the preceding trials, so they are conditional probabilities. When we analyse a compound
experiment, a tree diagram is extremely useful in keeping track of the possible outcomes at each
stage. A complete path from the start to a tip of the tree gives an outcome of the experiment.

Example 6. Cards and probability tree

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 14 | P a g e


Two cards are drawn without replacement from a standard deck of cards. Find the probability that
the second card is red.
1
Answer: 𝑃(𝑅2 ) = 2

Two cards are drawn without replacement from a standard deck of cards. Find the probability that
both cards are red.
25
Answer: 𝑃(𝑅1 ∩ 𝑅2 ) = 102

Example 7. Defective computer chips


A company uses one computer chip in assembling each unit of a product. The chips are purchased
from suppliers A, B and C and are randomly picked for assembling a unit. Twenty percent come
from A, 30% come from B, and the remainder come from C. The company believes that the
probability that a chip from A will prove to be defective in the first 24 hours of use is 0.03, and the
corresponding probabilities for B and C are 0.04 and 0.01, respectively. If an assembled unit is
chosen at random and tested for 24 continuous hours, what is the probability that the chip in it is
defective?
Answer: 𝑃(𝐷) = 0.023

2.5 Independent Events

Two events are said to be independent if the occurrence of one event does not affect the probability
of another event occurring. Thus, events A and B are independent if
𝑃 (𝐴 | 𝐵 ) = 𝑃 (𝐴 ) or 𝑃(𝐵|𝐴) = 𝑃(𝐵)
Thus,
𝑃 (𝐴 ∩ 𝐵 ) = 𝑃 (𝐴 | 𝐵 ) ∙ 𝑃 (𝐵 ) = 𝑃 (𝐴 ) ∙ 𝑃 (𝐵 )
or
𝑃(𝐵 ∩ 𝐴) = 𝑃(𝐵|𝐴) ∙ 𝑃(𝐴) = 𝑃(𝐵) ∙ 𝑃(𝐴)

Example 1: The probabilities for event A and event B are 𝑃 (𝐴) = 0.4 and 𝑃(𝐵 ) = 0.33
respectively. Find 𝑃 (𝐴 ∪ 𝐵 ),
(a) If A and B are mutually exclusive;
(b) If A and B are independent.

Solution:
(a) If A and B are mutually exclusive, then
𝑃 (𝐴 ∪ 𝐵 ) = 𝑃 (𝐴 ) + 𝑃 (𝐵 )
= 0.4 + 0.33
= 0.73
(b) If A and B are independent, then
𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴) ∙ 𝑃(𝐵) = 0.4 × 0.33 = 0.132
∴ 𝑃 (𝐴 ∪ 𝐵 ) = 𝑃 (𝐴 ) + 𝑃 (𝐵 ) − 𝑃 (𝐴 ∩ 𝐵 )
= 0.4 + 0.33 − 0.132
= 0.598

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 15 | P a g e


Example 2. Showing that two events are independent
A fair coin is tossed twice. Let E and F be the events
E={head on first toss}
F={head on second toss}
Determine whether or not E and F are independent events.

Example 3: Given that


1 3 3
𝑃 (𝐴 ) = , 𝑃 (𝐵 ) = , 𝑃(𝐵|𝐴) = , find 𝑃(𝐵 ∩ 𝐴)
13 51 51
Solution:
𝑃 (𝐵 ∩ 𝐴 ) = 𝑃 (𝐵 | 𝐴 ) ∙ 𝑃 (𝐴 )
3 1
= +
51 13
1
=
221

Example 4: A and B are two events such that


1 1 1
𝑃 (𝐵 ) = , 𝑃 (𝐴 ∩ 𝐵 ) = and 𝑃(𝐵|𝐴) = .
6 12 3
Find
(a) 𝑃(𝐴)
(b) 𝑃(𝐴|𝐵)
(c) 𝑃(𝐴|𝐵’)

Solution:
(a) 𝑃(𝐴)
𝑃 ( 𝐴 ∩ 𝐵 ) = 𝑃 ( 𝐵 |𝐴 ) 𝑃 ( 𝐴 )
1 1
= 𝑃 (𝐴 )
12 3
1
𝑃(𝐴) =
4
(b) 𝑃(𝐴|𝐵)
𝑃 (𝐴 ∩ 𝐵 )
𝑃(𝐴|𝐵) =
𝑃 (𝐵 )
1
= 12
1
6
1
=
2

(c) 𝑃(𝐴|𝐵′ )
𝑃(𝐴) = 𝑃(𝐴|𝐵) 𝑃(𝐵) + 𝑃(𝐴|𝐵′ ) 𝑃(𝐵′ )

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 16 | P a g e


1 1 1 5
= × + 𝑃 ( 𝐴 |𝐵 ′ )
4 2 6 6
1
𝑃(𝐴|𝐵′ ) =
5

Example 5: A survey was made among 100 graduates to report on their employment status. The
sample comprises 50 male and 50 female graduates. The result shows that 60 graduates are
unemployed with 2/3 of them male, while the remainders are employed with 3/4 of them female. If a
graduate is chosen randomly,
(a) Calculate the probability that the graduate is a male and unemployed
(b) If the graduate is a female, find the probability that she is unemployed
(c) If gender does not have any effect on employment, calculate the probability that the graduate
chosen is a female or unemployed.

Solution:
The above information may be summarized in the following table,
Employed Unemployed Total
Males 10 40 50
Females 30 20 50
Total 40 60 100

(a) 40
𝑃(Unemployed ∩ Male) = = 0.4
100
(b) 𝑃(Unemployed ∩ Female)
𝑃(Unemployed|Female) =
𝑃(Female)
20
= 100
50
100
0.2
=
0.5
= 0.4

(c) Given female and unemployed are independent events


𝑃(Unemployed ∩ Female) = 𝑃(Female) ∙ 𝑃(Unemployed)
= 0.5 × 0.6
= 0.3
𝑃(Female ∪ Unemployed) = 𝑃(Female) + 𝑃(Unemployed) − 0.3
= 0.5 + 0.6 − 0.3
= 0.8

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 17 | P a g e


Exercise 1. Smoking and sinusitis
In a study of smoking and sinusitis, 4000 people were studied, with the results as given in table
below. Suppose a person from the study is selected at random. On the basis of the data, determine
whether or not the events “having sinusitis” (L) and “smoking” (S) are independent events.

Smoker Nonsmoker Total


Sinusitis 432 1018 1450
No sinusitis 528 2022 2550
Total 960 3040 4000

Exercise 2. Survival rates


Suppose the probability of the event “Bob lives 20 more years” (B) is 0.8 and the probability of the
event “Doris lives 20 more years” (D) is 0.85. Assume that B and D are independent events.

Exercise 3. Dice
Two fair dice, one red and the other green, are rolled, and the numbers on the top faces are noted.
Let E and F be the events
E={number on red die is even}
F={sum is 7}

Test whether 𝑃(𝐸 ∩ 𝐹) = 𝑃(𝐸)𝑃(𝐹) to determine whether E and F are independent.

Exercise 4. Genders of offspring

For a family with at least two children, let E and F be the events
E={at most one boy}
F={at least one child of each gender}

Assume that a child of either gender is equally likely and that, for example, having a girl first and a
boy second is just as likely as having a boy first and a girl second. Determine whether E and F are
independent in each of the following situations:

a) The family has exactly two children


b) The family has exactly three children

2.5 BAYES’ FORMULA


Let 𝐵1 , 𝐵2 , … , 𝐵𝑛 be a set of mutually exclusive and exhaustive events on which 𝑃(𝐵1 ) + 𝑃 (𝐵2 ) +
⋯ + 𝑃(𝐵𝑛 ) = 1, then the conditional probability of event 𝐵𝑖 given that event A has already
occurred is
𝑃(𝐵𝑖 )𝑃(𝐴|𝐵𝑖 ) 𝑃(𝐵𝑖 )𝑃(𝐴|𝐵𝑖 )
𝑃(𝐵𝑖 |𝐴) = =
𝑃(𝐴) ∑ 𝑃(𝐵𝑖 )𝑃(𝐴|𝐵𝑖 )

where ∑ 𝑃 (𝐵𝑖 )𝑃(𝐴|𝐵𝑖 ) = 𝑃(𝐴)

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By using theorem of total probability,
𝑃(𝐴) = 𝑃(𝐴 ∩ 𝐵1 ) + 𝑃(𝐴 ∩ 𝐵2 ) + ⋯ + 𝑃(𝐴 ∩ 𝐵𝑛 )
= 𝑃(𝐵1 )𝑃(𝐴|𝐵1 ) + 𝑃(𝐵2 )𝑃(𝐴|𝐵2 ) + ⋯ + 𝑃(𝐵𝑛 )𝑃(𝐴|𝐵𝑛 )
= ∑ 𝑃(𝐵𝑖 )𝑃(𝐴|𝐵𝑖 )

Bayes’ theorem combines conditional probability and the theorem of total probability. In most
probability analysis, we begin with initial or prior probabilities. Then we obtain some additional
information from the sample drawn. Given, this additional information, we calculate the revised or
posterior probabilities using Bayes’ theorem.

Example 1: The probability of events 𝐴1 and 𝐴2 are 0.4 and 0.6 respectively. It is also known that
𝑃(𝐴1 ∩ 𝐴2 ) = 0. Suppose 𝑃(𝐵|𝐴1 ) = 0.2 and 𝑃(𝐵|𝐴2 ) = 0.05.
(a) Are 𝐴1 and 𝐴2 independent events?
(b) Compute 𝑃(𝐴1 ∩ 𝐵) and 𝑃(𝐴2 ∩ 𝐵).
(c) Compute 𝑃(𝐵).
(d) Compute 𝑃(𝐴1 |𝐵) and 𝑃(𝐴2 |𝐵).

Solution:
(a) 𝑃(𝐴1 ∩ 𝐴2 )
𝑃(𝐴1 |𝐴2 ) = = 0 ≠ 𝑃(𝐴1 ) −→ Dependent events
𝑃(𝐴2 )

(b) 𝑃(𝐴1 ∩ 𝐵) = 𝑃(𝐴1 ) 𝑃(𝐵|𝐴1 ) = (0.4)(0.2) = 0.08

𝑃(𝐴2 ∩ 𝐵) = 𝑃(𝐴2 ) 𝑃(𝐵|𝐴2 ) = (0.6)(0.05) = 0.03

(c) 𝑃(𝐵) = 𝑃(𝐴1 ) 𝑃(𝐵|𝐴1 ) + 𝑃(𝐴2 ) 𝑃(𝐵|𝐴2 ) = 0.08 + 0.03 = 0.11

(d) 𝑃(𝐴1 ∩ 𝐵) 0.08


𝑃(𝐴1 |𝐵) = = = 0.73
𝑃(𝐵) 0.11
𝑃(𝐴2 ∩ 𝐵) 0.03
𝑃(𝐴2 |𝐵) = = = 0.27
𝑃(𝐵) 0.11

Example 2. Quality control


A digital camcorder manufacturer uses one microchip in assembling each camcorder it produces.
The microchips are purchased from suppliers A, B and C and are randomly picked for assembling
each camcorder. Twenty percent of the microchips come from A, 35% come from B, and the
remainder come from C. Based on past experience, the manufacturer believes that the probability
that a microchip from A is defective is 0.03, and the corresponding probabilities for B and C are 0.02
and 0.01, respectively. A camcorder is selected at random from a day’s production, and its microchip
is found to be defective. Find the probability that it was supplied (a) from A, (b) from B, and (c) from
C. (d) From what supplier was the microchip most likely purchased?
12 14 9
Answer: 𝑃(𝑆1 |𝐷) = 35 , 𝑃(𝑆2 |𝐷) = 35 , 𝑃(𝑆3 |𝐷) = 35

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 19 | P a g e


Example 3. Jelly beans in a bag
Two identical bags, Bag I and Bag II, are on a table. Bag I contains one red and one black jelly bean;
Bag II contains two red jelly beans. A bag is selected at random, and then a jelly bean is randomly
taken from it. The jelly bean is red. What is the probability that the other jelly bean in the selected
bag is red?
2
Answer: 𝑃(𝐵2 |𝑅) = 3

UNIVERSITY COLLEGE OF TECHNOLOGY SARAWAK 20 | P a g e

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