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    1. The chapter introduces key probability concepts including probability distributions, expected value, and variance. 2. Common probability distributions covered are the binomial, normal, negative exponential, and Poisson distributions. Parameters such as μ and λ that define each distribution are explained. 3. Examples are provided to demonstrate calculating probabilities and properties of different distributions based on real world scenarios.

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    1. The chapter introduces key probability concepts including probability distributions, expected value, and variance. 2. Common probability distributions covered are the binomial, normal, negative exponential, and Poisson distributions. Parameters such as μ and λ that define each distribution are explained. 3. Examples are provided to demonstrate calculating probabilities and properties of different distributions based on real world scenarios.

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    1. The chapter introduces key probability concepts including probability distributions, expected value, and variance. 2. Common probability distributions covered are the binomial, normal, negative exponential, and Poisson distributions. Parameters such as μ and λ that define each distribution are explained. 3. Examples are provided to demonstrate calculating probabilities and properties of different distributions based on real world scenarios.

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    Download as ppt, pdf, or txt
    68 views34 pages

    PPT

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    1. The chapter introduces key probability concepts including probability distributions, expected value, and variance. 2. Common probability distributions covered are the binomial, normal, negative exponential, and Poisson distributions. Parameters such as μ and λ that define each distribution are explained. 3. Examples are provided to demonstrate calculating probabilities and properties of different distributions based on real world scenarios.

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    Chapter 2

    Probability Concepts
    and Applications
    Objectives
    Students will be able to:
    – Understand the basic foundations of probability
    analysis
    – Do basic statistical analysis
    – Know various type of probability distributions
    and know when to use them
    Probability

    Life is uncertain and full of surprise. Do you


    know what happen tomorrow
    Make decision and live with the consequence
    The probability of an event is a numerical value
    that measures the likelihood that the event can
    occur
    Basic Probability Properties

    Let P(A) be the probability of the event A, then


    0  P( A)  1
    The sum of the probability of all possible outcomes
    should be 1.
    Mutually Exclusive Events

    Two events are mutually exclusive if they can not


    occur at the same time. Which are mutually
    exclusive?
    • Draw an Ace and draw a heart from a standard deck of 52
    cards
    • It is raining and I show up for class
    • Dr. Li is an easy teacher and I fail the class
    • Dr. Beaubouef is a hard teacher and I ace the class.
    Addition Rule of Probability

    If two events A and B are mutually exclusive,


    then
    P( A  B)  P( A)  P( B)
    Otherwise
    P( A or B)  P( A)  P( B)  P( A and B)
    P(A or B)

    + -

    P(A) P(B) P(A and B)

    = P(A or B)
    Independent and Dependent

    Events are either


    – statistically independent (the occurrence of one
    event has no effect on the probability of
    occurrence of the other) or
    – statistically dependent (the occurrence of one
    event gives information about the occurrence of
    the other)
    Which Are Independent?

    (a) Your education


    (b) Your income level
    (a) Draw a Jack of Hearts from a full 52 card deck
    (b) Draw a Jack of Clubs from a full 52 card deck
    (a) Chicago Cubs win the National League pennant
    (b) Chicago Cubs win the World Series
    Conditional Probability

    Conditional probability
    the probability of event B given that event A
    has occurred P(B|A) or, the probability of
    event A given that event B has occurred
    P(A|B)
    Multiplication Rule of Probability

    If two events A and B are mutually exclusive,


    P( A and B)  P( A) P( B)
    Otherwise,
    P( A and B)  P( A) P( B | A)  P( B) P( A | B)
    Joint Probabilities, Dependent
    Events
    Your stockbroker informs you that if the stock market
    reaches the 10,500 point level by January, there is a
    70% probability the Tubeless Electronics will go up
    in value. Your own feeling is that there is only a
    40% chance of the market reaching 10,500 by
    January.
    What is the probability that both the stock market will
    reach 10,500 points, and the price of Tubeless will
    go up in value?
    Probability(A|B)

    P(A) P(AB) P(B)

    P(A|B) = P(AB)/P(B)
    Random Variables

    Discrete random variable - can assume only a finite


    or limited set of values- i.e., the number of
    automobiles sold in a year

    Continuous random variable - can assume any one


    of an infinite set of values - i.e., temperature,
    product lifetime
    Random Variables (Numeric)
    Experiment Outcome Random Variable Range of
    Random
    Variable
    Stock 50 Number of X = number of 0,1,2,, 50
    Xmas trees trees sold trees sold
    Inspect 600 Number Y = number 0,1,2,…,
    items acceptable acceptable 600
    Send out Number of Z = number of 0,1,2,…,
    5,000 sales people e people responding 5,000
    letters responding
    Build an %completed R = %completed 0  R  100
    apartment after 4 after 4 months
    building months
    Test the Time bulb S = time bulb 0  S  80,000
    lifetime of a lasts - up to burns
    light bulb 80,000
    (minutes) minutes
    Probability Distributions
    Table 2.4

    Outcome X Number P(X)


    Responding
    SA 5 10 0.10

    A 4 20 0.20

    N 3 30 0.30

    D 2 30 0.30

    SD 1 10 0.10
    D

    0.30
    0.25
    0.20 Figure 2.5
    0.15 Probability
    0.10
    Function
    0.05
    0.00
    1 2 3 4 5
    Expected Value of a Discrete Probability
    Distribution
    n
    E ( X )   X iP ( X i )
    i 1
    5
    E( X )  X
    i 1
    i P( X i )

     X 1 P( X 1 )  X 2 P( X 2 )  X 3 P( X 3 )
     X 4 P( X 4 )  X 5 P( X 5 )
     (5)( 0.1)  ( 4)( 0.2)  (3)( 0.3)
     ( 2)( 0.3)  (1)( 0.1)
     2.9
    Variance of a Discrete Probability
    Distribution
    n
       X  EX  P X i 
    2 2
    i
    i 1

      5  2.9  0.1  4  2.9 2 0.2 


    2 2

     3  2.9  0.3  (2 - 2.9) 2 (0.3)


    2

     (1  2.9) 2 (0.1)
     0.44 - 0.242  0.003  0.243  0.361
     1.29
    Binomial Distribution
    Assumptions:
    1. Trials follow Bernoulli process – two possible
    outcomes
    2. Probabilities stay the same from one trial to
    the next
    3. Trials are statistically independent
    4. Number of trials is a positive integer
    Binomial Distribution
    n = number of trials
    r = number of successes
    p = probability of success
    q = probability of failure
    Probability of r successes
    in n trials
    n! nr
     r
    p q
    r!(n - r)!
    Binomial Distribution
      np
       np( 1  p )
    Binomial Distribution

    N = 5, p = 0.50

    0.35
    0.30
    0.25
    0.20
    P(r)

    0.15
    0.10
    0.05
    0.00
    1 2 3 4 5 6
    (r) Number of Succes s es
    Probability Distribution Continuous Random
    Variable
    Normal Distribution
    Probability density function - f(X)

    5 5.05 5.1 5.15 5.2 5.25 5.3 5.35 5.4

    1 / 2 ( X   ) 2
    1
    f (X )  e 2
     2
    Normal Distribution for Different Values of 

    =40 =50 =60

    0
    30 40 50 60 70
    Normal Distribution for Different Values of
    
    =1
    =0.1

    =0.3 =0.2

    0 0.5 1 1.5 2
    Three Common Areas
    Under the Curve

    Three Normal distributions with different


    areas
    Three Common Areas
    Under the Curve
    Three Normal
    distributions
    with different
    areas
    The Relationship Between
    Z and X
    =100
    =15 x
    Z 

    55 70 85 100 115 130 145

    -3 -2 -1 0 1 2 3
    Haynes Construction Company
    Example
    Fig. 2.12
    Haynes Construction Company
    Example
    Fig. 2.13
    Haynes Construction Company
    Example
    Fig. 2.14
    The Negative Exponential
    Distribution
    f ( X )   e  x
    Expected value = 1/
    Variance = 1/2

    4
    =5
    3

    0
    0 0.2 0.4 0.6 0.8 1 1.2
    The Poisson Distribution
     x e  Expected value = 
    P( X ) 
    X! Variance = 
    0.30

    0.25 =2
    0.20

    0.15

    0.10

    0.05

    0.00
    1 2 3 4 5 6 7 8 9

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