Conditional Probability

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 Conditional Probability
1. Event probability given that another event
occurred
2. Revise original sample space to account for
new information
3. P(A | B) = P(A and B) = P(A  B)
P(B) P(B)

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 Example 12- Applying the Conditional
Probability Formula
To develop programs for business travelers staying at convention
hotels, a major hotel chain commissioned a study of executives
who play golf. The study revealed that 55% of the executives
admitted they had cheated at golf. Also, 20% of the executives
admitted they had cheated at golf and had lied in business.
Given an executive had cheated at golf, what is the probability
that the executive also had lied in business?

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Example 13- Applying the Conditional
Probability Formula
The investigation of consumer product complaints by the Federal Trade
Commission (FTC) has generated much interest by manufacturers in the
quality of their products. A manufacturer of an electromechanical kitchen
utensil conducted an analysis of a large number of consumer complaints and
found that they fell into the six categories shown below. If a consumer
complaint is received, what is the probability that the cause of the complaint
was product appearance given that the compliant originated during the
guarantee period?
Electrical Mechanical Appearance
During 18% 13% 32%
guarantee
period
After 12% 22% 3%
guarantee
period
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 Example 14- Applying the Conditional
Probability Formula
Consider the situation of the promotion status of male and female police
officers of a major metropolitan police force in US.
a) What is the probability that a randomly selected officer is a man and
promoted?
b) Find the conditional probability that an officer is promoted given that the
officer is a man and the conditional probability that an officer is
promoted given that the officer is a woman.
Men (M) Women (W) Total

Promoted (A) 288 36 324

Not promoted 672 204 876

(Ac)
Total 960 240 1200

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 The Multiplicative Rule
and Independent Events

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 Multiplicative Rule of Probability

Used to get probabilities for the intersection of

two events:

P(A and B) = P(A  B)

= P(A)  P(B|A)
= P(B)  P(A|B)

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 Example 15- Applying the
Multiplicative Rule
An investor in wheat futures is concerned with the following
events:
B: {US production of wheat will be profitable next year}
A: {A serious drought will occur next year}
The investor believes that the probability is 0.01 that production
of wheat will be profitable assuming a serious drought will occur
in the same year. He also thinks that the probability is 0.05 that
a serious drought will occur.
Based on the information provided, what is the probability that a
serious drought will occur and that a profit will be made?

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 Example 16- Applying the Multiplicative
Rule (Numerous Sample Points)
A county welfare agency employs 10 welfare workers who
interview prospective food stamp recipients. Periodically the
supervisor selects, at random, the forms completed by 2 workers
to audit for illegal deductions. Unknown to the supervisor, 3 of
the workers have regularly been giving illegal deductions to
applicants. What is the probability that both of the 2 workers
chosen have been giving illegal deductions?

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 Independent Events
Events A and B are independent events if the
occurrence of B does not alter the probability that A
has occurred; that is
P(A | B) = P(A)
When events A and B are independent, it is also true
that
P(B | A) = P(B)
Events that are not independent are said to be
dependent.

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 Example 17- Checking for Independence

Consider the experiment of tossing a fair die and

let
A: {Observe an even number}
B: {Observe a number less than or equal to 4}

Are events A and B independent?

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 Example 18- Checking for
Independence
Refer to the consumer product complaint study example. The
percentages of complaints of various types during and after the
guarantee period are shown there. Define the following events:

A: Cause of complaint is product appearance

B: Complaint occurred during the guarantee term.

Are A&B independent events?

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 Probability of Intersection of Two
Independent Events
If events A and B are independent, the
probability of the intersection of A and B equals
the product of the probabilities of A and B; that
is

P(A and B) = P(A  B) = P(A)  P(B)

The converse is also true: If

P(A  B) = P(A)  P(B) ; then events A and B
are independent.
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 Example 19- Probability of Independent
Events Occurring Simultaneously
Refer to Example 3. Recall that USA Today found that all
of U.S. Firms that use diversity training, 38% state that
their primary reason for using it is to stay competitive.
a) What is the probability that in a sample of two firms
that use diversity training, both primarily use it to
stay competitive?
b) What is the probability that in a sample of 10 firms
that use diversity training, all 10 primarily use it to
stay competitive?

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 Bayes’ Rule

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 Bayes’ Rule
About revising probabilities when new information is
obtained

Prior New Application of Posterior

Probabilities information Bayes’ Rule Probabilities

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 Application of Bayes’ Rule
Consider a manufacturing firm that receives shipments
of parts from two different suppliers. Let S1 denote the
event that a part is from supplier and S2 denote the
event that a part is from supplier 2. Currently 65% of
the parts purchased by the company are from supplier
1 and 35% are from supplier 2. The quality of the
purchased parts varies with the source of supply.
Historical data suggest that the percentage of good
parts that come from supplier 1 and 2 are 98% and
95%, respectively.

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 Application of Bayes’ Rule
0.02 Defective
Supplier
0 .65 1
0.98 Good

0.05 Defective
0 .35 Supplier
2
0.95 Good

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 Application of Bayes’ Rule
Suppose that the parts from the two suppliers
are used in firm’s manufacturing process and
that a machine breaks down because it attempts
to process a defective part. Given the
information that the part is defective, what is
the probability that it came from supplier 1 and
what is the probability that it came from
supplier 2?

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 Application of Bayes’ Rule

P(S1 | D) = ?
P(S2 | D) = ?

P(S1 )P(D | S1 )
P(S1 | D) =
P(S1 )P(D | S1 ) + P(S2 )P(D | S2 )
P(S1 | D) = 0.4262
P(S2 | D) = 0.5738
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 Bayes’ Rule
Given k mutually exclusive and exhaustive
events B1, B1, . . . Bk , such that
P(B1) + P(B2) + … + P(Bk) = 1,
and an observed event A, then

P(Bi Ç A)
P( Bi | A) =
P( A)
P(Bi )P( A | Bi )
=
P( B1 )P( A | B1 ) + P(B2 )P( A| B2 ) + ... + P(Bk )P( A | Bk )

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 Key Ideas

Probability Rules for k Sample Points,

S1, S2, S3, . . . , Sk

1. 0 ≤ P(Si) ≤ 1

2. å P( S ) = 1
i

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 Key Ideas

Combinations Rule

Counting number of samples of n elements

selected from N elements

æ Nö N! N ( N - 1) ( N - 2 ) ( N - n + 1)
çè n ÷ø = n!( N - n)! = n( n - 1) ( n - 2 ) ( 2 ) (1)

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 Key Ideas

Bayes’ Rule

P(Si )P( A| Si )
P(Si | A) =
P(S1 )P( A| S1 ) + P(S2 )P( A| S2 ) + ... + P(Sk )P( A| Sk )

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