Chapter 4 Principles of Probability Prepared by Chhay

Chapter 4 Principles of Probability Prepared by Chhay Phang Tel: 855 -012 84 0102 E-mail: phangg 2002@yahoo. com

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4. 1 Introduction • Business matters, decision must be made in the presence of uncertain outcomes • Improving our ability to judge the occurrence of future event • To minimize the risk and perilous speculation associated with the decision-making process 3

4. 2 Experiment, Outcome and Set • Probability is the numerical likelihood, measured between 0 and 1, that an event will occur. • Experiment • Well-defined outcome • Sample space 4

4. 3 Approaches to Probability • The relative frequency approach • The subjective approach 5

4. 3 Approaches to Probability(cont. ) • The classical approach 4. 4 Unions, Intersections, and the Relationships between Events. • Intersection of A and B the of all elements that are in both A and B. 6

• The Union of A and B the set of all elements that are in A or B. • Mutually exclusive • Collectively exhaustive • Independent events • Complementary events 7

4. 5 Contingency Tables and Probability Table • Table 4. 1 Contingency table for king Dynamics • Table 4. 1 Probability table for king Dynamics 4. 6 Conditional Probability the probability that event A will occur given, or on the condition that event B has already occurred. 8

4. 7 The two rules of Probability A. Multiplication Rules • For independent events. • For dependent events. 9

B. Additional Rule • For not mutually exclusive events. • For mutually exclusive events. 10

4. 8 Bayes’ Theorem • Figure 4. 2 p. 90 Tree Diagram for Dunham Manufacturing 11

4. 9 Counting Technique • Permutations • Combinations • Exercises: all of Chapter exercises 12

Exercises chapter 1, 2, 3, 6, 7, 8 9, 10, 11, 12 13, 14, 15, 16 17, 18, 20 13

Thank You thank you all for your attention. 14