1 / 11

Probability in Business

Probability in Business. BUSN 311 with leah Murray. What is probability?. Probability- the chance that something will occur This can be calculated many different ways Classical/Theoretical What happens in theory Empirical What actually happens in an experiment/ data collection

keith-callahan
Download Presentation

Probability in Business

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Probability in Business BUSN 311 with leah Murray

  2. What is probability? • Probability- the chance that something will occur • This can be calculated many different ways • Classical/Theoretical • What happens in theory • Empirical • What actually happens in an experiment/data collection **Law of large numbers** The more times you do an experiment the closer the two probabilities get*** • Subjective • Based on opinion not fact

  3. Writing probability • There are three ways to write probability • Fraction • Decimal • Percent Example: Find the of probability of picking a Jack out of a standard deck of cards

  4. Relative frequency • Give the empirical probability or how many times did an event occur?

  5. Finding the of probability multiple events • Focus on what is happening • OR – can do one event OR the other event • AND- must do multiple events Independent events- one event does not impact another events outcome -having children, flipping a coin, rolling a dice Dependent events-previous event DOES impact future events -eating the cookies in the break room, paying your bills

  6. One OR the other • I will give you $500 if you draw an Ace OR a spade from a standard deck of cards. What is the probability you will walk away with $500? • Formula: P(A or B)=P(A)+P(B)-P(A and B) • Mutually exclusive events

  7. Must do BOTH!!! • I will give you $1000 if you flip a head on a coin AND roll a 2 on a standard dice. What is the probability you win? • Formula: P(A and B)=P(A)P(B) • This rule can be extended to more than two events • Example: Find the probability of having three girls

  8. Dependent events • Think very carefully about what is changing after each event occurs • You have a bag of jelly beans 3 red, four blue and 3 yellow find the probability of getting 2 red ones (assuming you eat a bean after you choose it)

  9. The compliment • Remember the total probability must sum to 1 or 100% • Example: There is a 20% chance of rain today, if I hang my laundry outside what is the probability it will remain dry?

  10. Using the compliment • Can be easier to think in terms of “loosing” or the opposite situation than what you are given • Calculate this probability and use it to find the probability of winning by subtracting from 1 or 100% • Example: A coin is tossed 3 times find the probability of getting at least one head

  11. What do I do on my IP this week??? • Describe the data set • Variables used • Codes used • Quantitative or qualitative? • How is statistics used in the workplace? • Be SPECIFIC! • Remember to check out the unit 2 IP hints for some tables to help you organize your information • When you calculate your probabilities be sure to the TOTAL for your denominator or total number for ALL calculations. • Format as an email • To • From • Date • Subject

More Related