Probability 1
Probability 1
THEORY
AND
APPLICATIONS
PROBABILITY THEORY
Probability Theory is the study of ‘chance’.
It has vitally important applications in
Sciences Economics
Politics Sports
Life insurance Quality control
Production management
and host of other areas.
DEFINITIONS
Experiment:
SampleSpace (S):
The set of all possible outcomes of an
experiment.
SAMPLE SPACE
SAMPLE SPACE
DEFINITIONS
Event:
8 6
13
Sample Space
=S
= {HHH, HHT, HTH, HTT, THH, THT,
TTH, TTT}
i.e., n (S) = 8
Continued..
Let Event A: getting 1 head
Thus,
A = {HTT, THT, TTH}
i.e., n (A) = 3
Hence, probability of getting 1 head
= P(A) = n (A)/n (S)
= 3/8
EXAMPLE 3
A pair of dice is thrown. Find the
probability of getting (i) a total of 10 (ii)
both odd digits (iii) a total that is multiple 3
Continued..
For the experiment,
S = {(1, 1), (1, 2), (1, 3),….., (6, 6)}
i.e., n (S) = 36
Let event A: total is 10
A = {(4, 6), (5, 5), (6, 4)}
∴ n (A) = 3
Thus, P(A) = 3/36 = 1/12
Continued..
Let event B: both are odd digits
B = {(1, 1), (1, 3), (1, 5), (3, 1), (3, 3), (3,
5), (5, 1), (5, 3), (5, 5)}
∴ n (B) = 9 and P(B) = 9/36 = ¼
Let event C: total is a multiple of 3
C = {(1, 2), (1, 5), (2, 1), (2, 4), (3, 3), (3,
6), (4, 2), (4, 5), (5, 1), (5, 4), (6, 3), (6, 6)}
∴ n (C) = 12 and P(C) = 12/36 = 1/3
EXAMPLE 4
From a well-shuffled pack of 52 cards, a
card is drawn at random. What is the
probability that it is (i) red (ii) spade (iii)
picture (iv) face (v) heart or king.
Continued..
Forthe experiment,
S = {AS, 2S, .., KS, AH, 2H, .., KH, AC, 2C, ..,
KC, AD, 2D, .., KD}
i.e., n (S) = 52
Let event A: red card is drawn
(Heart and Diamond)
n (A) = 26 and P(A) = 26/52 = 1/2
Continued..
Let event B: spade card is drawn
(There are 13 cards of spade)
n (B) = 13 and P(B) = 13/52 = ¼
P(J) = 1 - P(H)
= 1 - 5/18
= 13/18
EXAMPLE 4
One lottery ticket is drawn at random from a set
of 20 tickets numbered 1, 2, …, 20. Find the
probability that the number on the ticket drawn
is divisible by 3 or 5.
Here n (S) = 20.
Let A: number is divisible is divisible by 3 or 5
A = {3, 5, 6, 9, 10, 12, 15, 18, 20}
n (A) = 9
P(A) = 9/20
If the letters of the word THURSDAY be
arranged at random, what is the probability that
the arrangement
(i) begins with T
(ii) begins with T and ends with U.
P (coin is silver)
= P (silver coin is drawn from A or B)
= P(A) × P(SA) + P(B) × P(SB)
= ½ × 4/9 + ½ × 6/10
= 47/90
EXAMPLE 3
A purchasing agent has placed rush orders for a
particular raw material with two different
suppliers A and B. If neither order arrives in 4
days, the production process must shut down
until at least one of the orders arrives. The
probability that A delivers the material in 4 days
is 0.55 and that B is 0.35. What is the probability
that:
(i) both the suppliers deliver material in 4 days?
(ii) at least one supplier delivers the material in 4
days?
(iii) the production will be shut?
Solution
Given: P(A) = P (A supplies in 4 days) = 0.55
P(B) = P (B supplies in 4 days) = 0.35
Thus, P (not A) = 0.45 and P (not B) = 0.65
(i) P (both deliver material in 4 days)
= 0.55 × 0.35 = 0.1925
(ii) P (at least one delivers the material in 4
days) = P (A but not B) + P (not A but B)
= 0.55 × 0.65 + 0.45 × 0.35
= 0.515
Solution
(iii) P (the production will be shut)
= P (not A and not B)
= 0.45 × 0.65
= 0.2925
There is 29.25% chance that the
production will be shut because of
unavailability of the raw material.
EXAMPLE 4
Small cars get better mileage but are not as safe
as big cars. Small cars accounted for 18% of the
vehicles on the road but involved in 11898
deaths in accidents. The probability of an
accident involving a small car leading to fatalities
is 0.128 and the probability of an accident not
involving a small car leading to fatalities is 0.05.
Suppose you learn an accident involving a
fatality, what is the probability a small car was
involved?
Given: P(S) = P (small car on road) = 0.18
P (not S) = 1 – 0.18 = 0.82
P (fatal when small car) = P (FS) = 0.128
P (fatal when not small car)
= P (Fnot S) = 0.05.
P (fatal accident with small car)
= P (S and F)
= 0.18 × 0.128 = 0.02304
P (fatal accident)
P(F) = P (S and F) + P (not S and F)
= 0.18 × 0.128 + 0.82 × 0.05
= 0.06404
P (small car involved fatal accident)
= P (SF)
= P (S and F) / P(F)
= 0.02304/0.06404
= 0.36
EXAMPLE 5
A local bank is reviewing its credit card policy
with a view toward recalling some of its credit
cards. In the past approximately 5% of the card
holders have defaulted and the bank has been
unable to collect the outstanding balance.
Hence, management has established a prior
probability of 0.05 that any particular card holder
will default. The bank has further found that the
probability of missing one or more payments is
0.2 for customers who do not default. Of course
the probability of missing one or more payments
for those who default is 1.
EXAMPLE 5..
Given that the customer has missed a
payment, compute the probability that the
customer will default.
The bank would like to recall its card if the
probability that a customer will default is
greater than 0.2. Should the bank recall its
card if the customer misses a monthly
payment? Why or why not?
Tree diagram
Given: P(D) = P (customer defaults) = 0.05
P (not D) = 1 – 0.05 = 0.95
Also, P (misses defaults) = P (MD) = 1
and P (misses not default) = P (Mnot D) = 0.2
P (D and M) = P(D) × P (M D) = 0.05 × 1 = 0.05
P(M)
= P(D) × P (M D) + P (not D) × P (M not D)
= 0.05 × 1 + 0.95 × 0.2
= 0.24