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Unit 4 Busniess Statistics

The document discusses key concepts in probability theory including: 1) The definition of probability as how likely an event is to occur between 0-1. Statistics analyzes events governed by probability. 2) Basic probability laws including the addition rule where the probability of events A or B equals the individual probabilities minus their intersection, and the multiplication rule relating the probability of both A and B occurring. 3) Common probability distributions like the binomial, Poisson, and normal distributions which are used to model random variables and events in areas like manufacturing, clinical trials, call centers and the natural sciences.

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24 views11 pages

Unit 4 Busniess Statistics

The document discusses key concepts in probability theory including: 1) The definition of probability as how likely an event is to occur between 0-1. Statistics analyzes events governed by probability. 2) Basic probability laws including the addition rule where the probability of events A or B equals the individual probabilities minus their intersection, and the multiplication rule relating the probability of both A and B occurring. 3) Common probability distributions like the binomial, Poisson, and normal distributions which are used to model random variables and events in areas like manufacturing, clinical trials, call centers and the natural sciences.

Uploaded by

k89794
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Unit 4

MBA/BBA/B.com /B.Tech /UGC Net

By
Dr. Anand Vyas
•Probability is simply how likely something is to
happen. Whenever we're unsure about the
outcome of an event, we can talk about the
probabilities of certain outcomes—how likely
they are. The analysis of events governed by
probability is called statistics.
Basic Probability Theory
Probability theory is the mathematical
framework that allows us to analyze chance
events in a logically sound manner. The
probability of an event is a number indicating
how likely that event will occur. This number is
always between 0 and 1, where 0 indicates
impossibility and 1 indicates certainty.
Addition and Multiplication Law
If AA and BB are two events in a probability experiment, then the
probability that either one of the events will occur is:
P(A or B)=P(A)+P(B)−P(A and B)P(A or B)=P(A)+P(B)−P(A and B)
This can be represented in a Venn diagram as:
P(A∪B)=P(A)+P(B)−P(A∩B)
Addition Law
Multiplication Law
According to the multiplication rule of
probability, the probability of occurrence of
both the events A and B is equal to the product
of the probability of B occurring and the
conditional probability that event A occurring
given that event B occurs.
Baye’s Theorem
Bayes' Theorem states that the conditional probability
of an event, based on the occurrence of another event,
is equal to the likelihood of the second event given the
first event multiplied by the probability of the first event
Probability Theoretical Distributions
•A random exponent is assumed as a model for
theoretical distribution, and the probabilities
are given by a function of the random variable
is called probability function. For example, if we
toss a fair coin, the probability of getting a head
is \frac{1}{2}.
Binomial distribution
Binomial distribution summarizes the number of trials, or
observations when each trial has the same probability of
attaining one particular value. The binomial distribution
determines the probability of observing a specified number of
successful outcomes in a specified number of trials.

Manufacturing company uses binomial distribution to detect


the defective goods or items. In clinical trail binomial trial is
used to detect the effectiveness of the drug. Moreover
binomial trail is used in various field such as market research.
Poisson Distribution.
In statistics, a Poisson distribution is a probability
distribution that is used to show how many
times an event is likely to occur over a specified
period. In other words, it is a count distribution.
Call centers use the Poisson distribution to model
the number of expected calls per hour that they'll
receive so they know how many call center reps
to keep on staff. For example, suppose a given call
center receives 10 calls per hour
A normal distribution is the proper term for a probability bell
curve. In a normal distribution the mean is zero and the
standard deviation is 1. It has zero skew and a kurtosis of 3.
Normal distributions are symmetrical, but not all symmetrical
distributions are normal.
Normal distributions are important in statistics and are often
used in the natural and social sciences to represent real-
valued random variables whose distributions are not
known. Their importance is partly due to the central limit
theorem.

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