Page 40 - EBOOK RISK MANAGEMENT

SHIFT A SHIFT B SHIFT B

7am to 3pm 3pm to 11pm to
11pm 7am
(0.15)
(0.45) (0.40)

Thus, the probability of fire occuring during either shift A or shift B will be:

P (A) or P (B) = 0.15 + 0.45
= 0.60

The probability of fire occuring during either shift B or shift C will be:

P (B) or P (C) = 0.45 + 0.40
= 0.85

When making business decisions based on mutually exclusive events, it's important

to understand the initiation and outcome factors of mutually exclusive events to
decide which one benefits the business and its customers the most.

For non-mutually exclusive events, there is probability that at least one of two

outcomes will occur or both events can occur at the same time. These means, there

are an overlapping area in the events.

EVENT A EVENT B

Factory burn Factory
collapse
(0.45)
(0.25)

P (A and B) 0.20

The probability that an outcome will be in one event or the other event is the sum

of their individual probabilities minus the probability of the outcome being in both
events:

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