Chapter 7 - 1 Chapter 7 Probability Basics 2 Chapter 7...

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Unformatted text preview: 1 Chapter 7 Probability Basics 2 Chapter 7 Introduction to Probability Basics Learning Objectives Probability Theory and Concepts Use of probability to model simple uncertain situation Discrete probability Distribution Continuous Probability Distribution 3 Chapter 7 (Probability Basics) Probabilities must satisfy the following: 1) Probabilities must lie between 0 and 1 (0<=P<=1) 2) Probabilities must add up P(A 1 or A 2 )= P(A 1 ) + P (A 2 ) if A 1 and A 2 cant both happen 3) Total probability must equal 1 4 Probability Basics Venn Diagrams More Probability Formulas Conditional Probability P(A|B)=P(A and B)/ P(B) Independence P(A i |B j ) = P(A i ) Complements P(B) = 1-P(B) 5 Probability Basics Total Probability of an Event P(A) =P(A and B)+P(A and B) =P(A|B) P(B) + P(A|B) P(B) Venn Diagram for total probability of an event 6 Probability Basics Bayes Theorem : P(B|A) = P(A|B) P(B) / P(A|B) P(B) Probability Distribution Random Variable Use of capital letter to present uncertain quantities 7...
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This note was uploaded on 12/04/2011 for the course BUSINESS 500 taught by Professor John during the Spring '11 term at Kansas.

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Chapter 7 - 1 Chapter 7 Probability Basics 2 Chapter 7...

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