2023

Introduction to Probability

Prof. Vishal Singh Patyal

Outline

• Basic probability concepts

• Conditional probability
• Bayes’ Theorem

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Probability
• Probability is a numerical measure of the likelihood that an
event will occur.
• Probability values are always assigned on a scale from 0 to 1.
• A probability near zero indicates an event is quite unlikely to
occur.
• A probability near one indicates an event is almost certain to
occur.

Introduction

• People use the term probability many times each

day. For example, physician says that a patient has a
50‐50 chance of surviving a certain operation.
Another physician may say that she is 95% certain
that a patient has a particular disease

• Probability is the chance that some event will

happen

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Methods of Assigning
Probabilities
• Classical method of assigning
probability
– Rules and laws
• Relative frequency of occurrence
–Cumulated historical data
• Subjective Probability
–Personal intuition or reasoning

Classical Probability
• Number of outcomes leading
to the event divided by the
P( E)  ne
total number of outcomes
possible N
• Each outcome is equally likely Where:
N  totalnumberof outcomes
• Determined a priori ‐‐ before
performing the experiment ne  numberof outcomesin E
• Applicable to games of chance
• Objective ‐‐ everyone correctly
using the method assigns an
identical probability

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Example
• Suppose a company has 200 workers and 70
are female, the probability of randomly
selecting a female from this company is

70/200 = 0.35

Relative Frequency Probability

• Based on historical data
• Computed after
performing the experiment P( E )  n e
N
• Number of times an event
occurred divided by the Where :
number of trials N  total number of trials
• Objective ‐‐ everyone
correctly using the method
assigns an identical n e
 number of outcomes
probability producing E

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Example
• A company wants to determine the probability that
its inspectors are going to reject the next batch of
raw materials from a supplier.
• Data gathered from company record books show that
the supplier sent the company 90 batches in the
past, and inspectors rejected 10 of them.
– The probability of the inspectors rejecting the next
batch is 10/90, or .11
– If the next batch is rejected, the relative frequency
of occurrence probability for the subsequent
shipment would change to 11/91 = .12
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Subjective Probability
• Comes from a person’s intuition or reasoning
• Subjective ‐‐ different individuals may
(correctly) assign different numeric
probabilities to the same event
• Degree of belief
• Useful for unique (single‐trial) experiments
– New product introduction
– Initial public offering of common stock
– Site selection decisions
– Sporting events

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Example
• Suppose a director of transportation for an oil
company is asked the probability of getting a
shipment of oil out of Saudi Arabia to the United
States within three weeks.
– A director who has scheduled many such shipments,
may be able to give an accurate probability that the
shipment can be made on time
• Physicians sometimes assign subjective
probabilities to the life expectancy of people who
have disease (like cancer, TB)

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Four Types of Probability

Marginal Probability

Union Probability

Joint Probability

Conditional Probability

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Four Types of Probability

Marginal Union Joint Conditional

P( X ) P( X  Y ) P( X  Y ) P( X| Y )
The probability The probability The probability The probability
of X occurring of X or Y of X and Y of X occurring
occurring occurring given that Y
has occurred

X X Y X Y
Y

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General Law of Addition

P( X Y )  P( X )  P(Y )  P( X Y )

X Y

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Office Productivity Case

• Yankelovich Partners conducted a survey for the American
Society of Interior Designers in which workers were asked
which changes in office design would increase productivity.
• Respondents were allowed to answer more than one type of
design change. The number one change that 70% of the
workers said would increase productivity was reducing noise.
• In second place was more storage/filing space, selected by
67%. If one of the survey respondents was randomly selected
and asked what office design changes would increase worker
productivity.
• Suppose 56% of all respondents to the survey had said that
both noise reduction and increased storage/filing space would
improve productivity:
• What is the probability that this person would select reducing
noise or more storage/filing space?
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• N represent the event “reducing noise.” Let S

represent the event “more storage/ filing space.
• As, 70% of the surveyed people responded that
reducing noise would create more productivity,
P(N) = .70.
• Also, 67% responded that increased storage
space would improve productivity, P(S) = .67
• 56% of all respondents to the survey had said
that both noise reduction and increased
storage/filing space would improve productivity:

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General Law of Addition ‐‐ Example

P( N  S )  P( N )  P( S )  P( N  S )

P ( N )  .70
N S
P( S )  .67
.56
P ( N  S )  .56
.70 .67
P ( N  S )  .70  .67  .56
 0.81

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Probability Matrices
• A probability matrix displays the marginal
probabilities and the intersection
probabilities of a given problem.
– Union probabilities and conditional
probabilities must be computed from the
matrix.

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Office Design Problem

Probability Matrix

Increase
Storage Space
Yes No Total
Noise Yes .56 .14 .70
Reduction No .11 .19 .30
Total .67 .33 1.00

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Office Design Problem

Probability Matrix
Increase
Storage Space
Yes No Total
Noise Yes .56 .14 .70
Reduction
No .11 .19 .30
Total .67 .33 1.00

P( N  S )  P( N )  P( S )  P( N  S )
 .70  .67  .56
 .81

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Problem
Consider a standard deck of 52 cards, with
four suits: ♥♣♦♠
Let event A = card is an Ace
Let event B = card is from a red suit
Find P(Ace). P(Red and Ace),
P(Red or Ace)

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Example:
Joint Probability
P(Red and Ace)
number of cards that are red and ace 2
 
total number of cards 52

Ace Not Total

Ace
Black 2 24 26
Red 2 24 26
Total 4 48 52

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Example:
Marginal (Simple) Probability
P(Ace)
2 2 4
 P( Ace and Re d)  P( Ace and Black )   
52 52 52

Ace Not Ace Total

Black 2 24 26
Red 2 24 26
Total 4 48 52

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Addition Rule Example

P(Red U Ace) = P(Red) + P(Ace) ‐ P(Red ∩ Ace)

= 26/52 + 4/52 ‐ 2/52 = 28/52
Don’t count
the two red
Color aces twice!
Type Red Black Total
Ace 2 2 4
Non‐Ace 24 24 48
Total 26 26 52

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Venn Diagram of the X or Y

but not Both Case

X Y

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The Neither/Nor Region

X Y

P( X  Y )  1  P( X  Y )

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The Neither/Nor Region

N S

P( N  S )  1  P( N  S )
 1  .81
 .19
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Example
Mutually Exclusive Event

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Special Law of Addition

If X and Y are mutually exclusive,
P( X  Y )  P( X )  P (Y )

Y
X

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Problem 2
The client company data from the Decision Dilemma reveal
that 155 employees worked one of four types of positions.
If a worker is randomly selected from the company.
• What is the probability that the worker is either
technical or clerical?
• What is the probability that the worker is either a
professional or a clerical?

Type of Gender
Position Male Female Total
Managerial 8 3 11
Professional 31 13 44
Technical 52 17 69
Clerical 9 22 31
Total 100 55 155

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Problem
Type of Gender
Position Male Female Total
Managerial 8 3 11
Professional 31 13 44
Technical 52 17 69
Clerical 9 22 31
Total 100 55 155
P(T  C )  P (T )  P (C )
69 31
 
155 155
 .645
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Problem
Type of Gender
Position Male Female Total
Managerial 8 3 11
Professional 31 13 44
Technical 52 17 69
Clerical 9 22 31
Total 100 55 155

P ( P  C )  P ( P )  P (C )
44 31
 
155 155
 .484
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Law of Multiplication

• The intersection of two events is called the joint

probability
• General law of multiplication is used to find the joint
probability
• General law of multiplication gives the probability that
both events x and y will occur at the same time
– P(X|Y) is a conditional probability that can be stated as the
probability of x given y

P( X  Y )  P( X )  P (Y | X )  P(Y )  P ( X | Y )

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Special Law of Multiplication

for Independent Events

• General Law
P( X Y )  P( X )  P(Y | X )  P(Y )  P( X | Y )
• Special Law
If events X and Y are independent,
P( X )  P( X | Y ), and P(Y )  P(Y | X ).
Consequently ,
P( X  Y )  P ( X )  P(Y )

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Problem 3
• A company has 140 employees, of which 30
are supervisors. 80 of the employees are
married, and 20% of the married employees
are supervisors. If a company employee is
randomly selected,
• What is the probability that the employee is
married and is a supervisor?

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Law of Multiplication
Problem

P ( X  Y )  P( X )  P(Y | X )  P(Y )  P( X | Y )

80
P( M )   0.5714
140
P ( S | M )  0.20
P( M  S )  P( M )  P( S | M )
 (0.5714)(0.20)  0.1143

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Problem 4
• A manufacturing firm produces pads of bound
paper. 3 % of all paper pads produced are
improperly bound.
• An inspector randomly samples two pads of
paper, one at a time. Because a large number of
pads are being produced during the inspection,
the sampling being done, in essence, is with
replacement.
• What is the probability that the two pads
selected are both improperly bound?

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• Let I denote improperly bound. The problem is

to determine
• The probability of I = .03, or 3% are improperly
bound. Because the sampling is done with
replacement, the two events are independent.
Hence, P (I1 and I2) = P (I1) * P (I2) = (.03)(.03)
= .0009

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Problem
• A study by Becker Associates, a San Diego travel
consultant, found that 30% of the traveling public
said that their flight selections are influenced by
perceptions of airline safety.
• 40 % of the traveling public wants to know the
age of the aircraft. Suppose 89% of the traveling
public who say that their flight selections are
influenced by perceptions of airline safety wants
to know the age of the aircraft.

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a. What is the probability of randomly selecting a

member of the traveling public and finding out that
she says that flight selection is influenced by
perceptions of airline safety and she does not want
to know the age of the aircraft?
b. What is the probability of randomly selecting a
member of the traveling public and finding out that
she says that flight selection is neither influenced by
perceptions of airline safety nor does she want to
know the age of the aircraft?

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Solution
• Let S = safety Let A = age
P(S) = .30 P(A) = .40 P(AS) = .89

• a) P(S  NA) = P(S) P(NAS)

but P(NAS) = 1 ‐ P(AS) = 1 ‐ .89 = .11
P(S  NA) = (.30)(.11) = .033

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• b) P(NS  NA) = 1 ‐ P(S  A) = 1 ‐ [P(S) + P(A) ‐

P(S  A)]
but P(S  A) = P(S)  P(AS) = (.30)(.89) = .267
P(NS  NA) = 1 ‐ (.30 + .39 ‐ .261) = .567

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Law of Conditional Probability

• The conditional probability of X given Y is
the joint probability of X and Y divided by
the marginal probability of Y.

P ( X  Y ) P (Y | X )  P( X )
P( X | Y )  
P (Y ) P (Y )

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Conditional Probability
A conditional probability is the probability of one event,
given that another event has occurred:
The conditional
P(A and B)
P(A | B)  probability of A given
P(B) that B has occurred
P(A and B) The conditional
P(B | A)  probability of B given
P(A) that A has occurred

Where P(A and B) = joint probability of A and B

P(A) = marginal probability of A
P(B) = marginal probability of B
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Law of Conditional Probability – Recall

Problem
• 70% of respondents believe noise reduction would
improve productivity.
• 56% of respondents believed both noise reduction
and increased storage space would improve
productivity
• A worker is selected randomly and asked about
changes in the office design
• What is the probability that a randomly selected
person believes storage space would improve
productivity given that the person believes noise
reduction improves productivity?

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Law of Conditional Probability

P ( N )  .7 0
S N P ( N  S )  .5 6
P(N  S)
P (S| N ) 
.56 P(N )
.70
.5 6

.7 0
 .8 0

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Problem

Of the cars on a used car lot, 70% have air conditioning

(AC) and 40% have a CD player (CD). 20% of the cars

have both.

 What is the probability that a car has a CD player,

given that it has AC ?

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CD No CD Total
AC 0.2 0.5 0.7
No AC 0.2 0.1 0.3
Total 0.4 0.6 1.0

P(CD and AC) .2

P(CD | AC)    .285
P(AC) .7
Given AC, we only consider the top row (70% of the
cars). Of these, 20% have a CD player. 20% of 70% is
about 28.57%.

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Computing Conditional
Probability: Decision Trees
.2
.4
P(CD and AC) = .2
Given CD or
no CD:
P(CD and AC/) = .2
.2
.4
All
Cars .5
.6
P(CD/ and AC) = .5

.1 P(CD/ and AC/) = .1

.6

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Computing Conditional
Probability: Decision Trees
.2
.7
P(AC and CD) = .2
Given AC or
no AC:
P(AC and CD/) = .5
.5
.7
All
Cars .2
.3
P(AC/ and CD) = .2

.1 P(AC/ and CD/) = .1

.3

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Independent Events
• If X and Y are independent events, the
occurrence of Y does not affect the probability
of X occurring.
• If X and Y are independent events, the
occurrence of X does not affect the probability
of Y occurring.
If X and Y are independent events,
P( X | Y )  P ( X ), and
P(Y | X )  P (Y ).

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Problem 8
• In a recent year, business failures in the United
States numbered 83,384, according to Dun &
Bradstreet. The construction industry
accounted for 10,867 of these business
failures. The South Atlantic states accounted
for 8,010 of the business failures.
• Suppose that 1,258 of all business failures were
construction businesses located in the South
Atlantic states. A failed business is randomly
selected from this list of business failures.

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Calculate
a) What is the probability that the business is located in the
South Atlantic states?
b) What is the probability that the business is in the
construction industry or located in the South Atlantic
states?
c) What is the probability that the business is in the
construction industry if it is known that the business is
located in the South Atlantic states?
d) What is the probability that the business is not located in
the South Atlantic states if it is known that the business is
not a construction business?
e) Given that the business is a construction business, what is
the probability that the business is not located in the
South Atlantic states?
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• Let C = construction
• Let S = South Atlantic
– 83,384 total failures
– 10,867 failures in construction
– 8,010 failures in South Atlantic
– 1,258 failures in construction and South
Atlantic

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a) P(S) = .09606
b) P(C or S) = .2113
c) P(CS) = .15705
d) P(NSNC) = .9069
e) P(NSC) = .8842

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Bayes’ Theorem

• Bayes’ Theorem is used to revise previously

calculated probabilities based on new
information.
• Developed by Thomas Bayes in the 18th
Century.
• It is an extension of conditional probability.

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Bayes’ Theorem

• We begin probability analysis with initial or

prior probabilities.
• Then, from a sample or a product test we
obtain some additional information.
• Given this information, we calculate revised or
posterior probabilities.

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Revision of Probabilities: Bayes’ Rule

P(Y | Xi)P( Xi)

P( Xi | Y ) 
P(Y | X 1)P( X 1)  P(Y | X 2)P( X 2)    P(Y | Xn)P( Xn)

where:
Xi = ith event of k mutually exclusive and
collectively exhaustive events
Y = new event that might impact P(Xi)

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Problem 9
• Machines A, B, and C all produce the same two parts, X
and Y. Of all the parts produced, machine A produces
60%, machine B produces 30%, and machine C
produces 10%. In addition
– 40% of the parts made by machine A are part X.
– 50% of the parts made by machine B are part X.
– 70% of the parts made by machine C are part X.
• A part produced by this company is randomly
sampled and is determined to be an X part. With
the knowledge that it is an X part, revise the
probabilities that the part came from machine A,
B, or C.
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• Prior probability
– machine A is 0.60, machine B 0.30, machine C
0.10
• The conditional probabilities
– P (XA) = 0.40,
– P (XB) = 0.50, P (XC) = 0.70

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Revised Probabilities

After the probabilities are revised, it is apparent that the

probability of the part being made at machine A
decreased and that the probabilities that the part was
made at machines B and C increased

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Tree diagram

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Bayes’ Theorem
Problem

• A drilling company has estimated a 40% chance of

striking oil for their new well.
 A detailed test has been scheduled for more
information. Historically, 60% of successful wells
have had detailed tests, and 20% of unsuccessful
wells have had detailed tests.
 Given that this well has been scheduled for a
detailed test, what is the probability that the well
will be successful?

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Bayes’ Theorem
Example

 Let S = successful well

 U = unsuccessful well
 P(S) = .4 , P(U) = .6 (prior probabilities)
 Define the detailed test event as D
 Conditional probabilities:
P(D|S) = .6 P(D|U) = .2

Goal: To find P(S|D)

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Bayes’ Theorem
Example
Given the detailed test, the revised probability of a
successful well has risen to .667 from the original
estimate of 0.4.
Prior Conditional Joint Revised
Event
Prob. Prob. Prob. Prob.
S (successful) .4 .6 .4*.6 = .24 .24/.36 = .667
U (unsuccessful) .6 .2 .6*.2 = .12 .12/.36 = .333

0.36

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Bayes’ Theorem
Example
Apply Bayes’ Theorem:
P(D | S)P(S)
P(S | D) 
P(D | S)P(S)  P(D | U)P(U)
(.6)(.4)

(.6)(.4)  (.2)(.6)
.24
  .667
.24  .12

So, the revised probability of success, given that this

well has been scheduled for a detailed test, is .667

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Problem
A proposed shopping center will provide strong competition
for downtown businesses like L. S. Clothiers. If the shopping
center is built, the owner of L. S. Clothiers feels it would be
best to relocate to the shopping center.
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 change

Using subjective judgment:

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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 L. S. Clothiers revise the
probabilities that the town council will approve or disapprove the
zoning change?

Past history with the planning board and the town council indicates
the following:
Hence:

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Tree Diagram
Example: L. S. Clothiers

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Exercise
A firm has tendered for two independent
contracts. It estimates that it has
probability 0.4 of obtaining contract A and
probability 0.1 of obtaining contract B.
Find the probability that the firm: (i)
obtains both contracts. (ii) obtains neither
of the contracts (iii) obtains atleast one
contract.

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i) Pr (both contracts occur) = .04

ii) Pr(neither contract occurs) = .54
note if Pr of getting contract is .4, then not
getting contract is 1 ‐ .4 = .6
iii) Pr (at least one contract occurs) = .5

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Class Exercise
In 2010,24% of all highway fatalities involved
rollovers; 15.8% of al fatalities in 2010 involved
SUV’s,vans and pickups given that the fatality
involved a rollover. Given that a rollover was
not involved ,5.6% of all fatalities involved
SUV’s, vans and pickups. Consider the
following:
A= fatalities involved an SUV, van or pickup
B= fatality involved a rollover

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a.Use Baye’s Theorem to find fatality

involved a rollover, given that fatality
involved is an SUV, a van or pick up
b. Compare the result in (a) to the
probability that fatality involved a rollover
and comment on whether SUV’s ,vans,
and pick ups are generally more prone to
rollover accidents than other vehicles.

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Formulas

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Thank You

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