Page 188 - BA2 Integrated Workbook - Student 2017

Chapter 12

Joint probabilities

So far only a very small number of alternatives have been considered in the
examples. In practice a greater number of alternative courses of action may exist,
uncertainty may be associated with more than one variable and the values of
variables may be interdependent, giving rise to many different outcomes.

Where we are considering the joint probability of two independent variables,
we multiply their probabilities together.

For example in a factory it was found that there was a 1% chance of a fault during
manufacturing stage and a 3% chance of a fault during the painting stage

If these faults are independent of each other, the chance that a final product will have
a fault in both the manufacture and the painting would be 0.01 × 0.03 = 0.0003, or
0.03%.

Go over illustration 6

180