Probability is the relative frequency with which an event occurs. Probabilityhelps managers make rationaldecisions in situations involving uncertainty.There are 3types of probability:

• Empirical Probability is determined by observation. For example, the number of defects in 10,000 widgets was observed to be 25. So, P(defective) = 25/10,000.
• Subjective Probability - Subjective probability measures the likelihood of an event subjectively.
• Rationally derived from experience of the past,knowledge, and conditions of the present.
• A "personal belief ", allowing substantial variation in measures.
• Example: Based on past experience, I feel that the probability of candidate A winning the election is about 60%.
• Classical Probability requires enumerating all possible outcomes, counting the outcomes of interest, and computing probability of the outcome(s) of interest = number of the outcome(s) of interest / the total number of outcomes.
• Example: If there are 40 even numbers and 60 odd numbers randomly distributed randomly in a box, the probability of drawing an even number, P(even) = 40/(40+60).

The Probability Rules:

• Probability of an outcome can take any value from 0 or 0% (impossible) to 1 or 100% (certainty).
• The probability of all outcomes is 100%.
• An event consists of 1 or more outcomes.
• The probability of an event not occurring is 1 minus the probability that it occurs.

Select all VALID probabilities values.

49/50

50/49

1

110%

1.01

-0.25

0%