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Statistics for Decision- Making in Business - Maricopa Community ...

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In fact, recall Example 5 deal<strong>in</strong>g with the contam<strong>in</strong>ated corn crop. What are all the possibilities<br />

<strong>for</strong> shipp<strong>in</strong>g out two bushels from the total of 20 Let‟s list them out:<br />

0 contam<strong>in</strong>ated bushels and 2 uncontam<strong>in</strong>ated bushels ship (call it<br />

) )<br />

1 contam<strong>in</strong>ated and 1 uncontam<strong>in</strong>ated bushels ship (call it )<br />

2 contam<strong>in</strong>ated bushels ship (call it )<br />

Are there any others Not unless there is a possibility we have not considered. S<strong>in</strong>ce two bushels<br />

are guaranteed to go out, the outcome must fall <strong>in</strong>to one of the three categories listed.<br />

Let‟s calculate the probability <strong>for</strong> each of these by hand:<br />

( ) ( )<br />

( ) ( )<br />

( ): there are two possibilities; either the first is contam<strong>in</strong>ated and the second is not, or<br />

vice versa. We must consider both outcomes below:<br />

o ( )<br />

( ) ( )<br />

o ( )<br />

( ) ( )<br />

These two possibilities give 9.5% + 9.5% = 19% of the sample space.<br />

( ) (from previous calculation)<br />

(NOTE: Importantly, summ<strong>in</strong>g these three probabilities gives 1, as stated <strong>in</strong> the axioms!)<br />

<strong>Statistics</strong> <strong>for</strong> <strong>Decision</strong>-<strong>Mak<strong>in</strong>g</strong> <strong>in</strong> Bus<strong>in</strong>ess © Milos Podmanik Page 94

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