Lct03 - Introduction to Business Statistics Lecture 3...

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1 Introduction to Business Statistics Lecture 3 Probability An experiment is any procedure or process that produces a well-defined set of outcomes. Why probability can explain variation in data sets? Before an Experiment After an Experiment Uncertainty Variability Measured by Probability Explained by Probability
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2 Probability as Relative Frequency In the workers’ test-score example, for any one worker ( n =1), randomly selected from the population of N =5000, his/her score can be any one of the 26 possible values (i.e. 0 to 25). What is the probability that a randomly selected worker’s score X is equal to some particular value x , say, 20? Need to define the term probability: Let P ( X =20) denote the probability of a randomly selected worker’s score equals to, say, 20 and it is defined as the following ratio: population in the , workers, of number total the 20 score with population in the workers of number the N i.e. N n x X P x ) (
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3 To facilitate our discussion without listing all 5000 scores, let’s assume that the size of workforce is only 296 and we have tested all of them. 25 2 1 0 n n n n 296 so N n n n x X P 25 1 0 ) any ( 1 values) realizable 26 those other than any ( x X P 0 What about 296 158 ) 20 ( 20 1 0 N n n n X P 296 138 296 158 1 ) 20 ( 1 ) 20 ( 25 21 X P N n n X P 296 138 296 7 1 ) 20 ( ) 10 ( 1 296 151 ) 20 10 ( 20 11 X P X P N n n X P
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4 Some Key Words Definition : The collection of all possible outcomes of an experiment is the sample space . Any subset of the sample space is called an event . In the worker test score example, the set of all 26 possible scores,
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This note was uploaded on 11/23/2010 for the course BBA ISOM111 taught by Professor Hu during the Fall '08 term at HKUST.

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Lct03 - Introduction to Business Statistics Lecture 3...

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