This is one of the tougher topics on the GMAT. The good news is that you don't have to master it. Although the topic is tough, the questions which you are tested on are basic level. So you only need to learn the basic concept of counting (multiplication rule) and beginner level Permutation and Combination. Nothing is going to come beyond the scope of this article. Read on!
Permutations
A permutation is an ordered arrangement.
By the PERMUTATIONS of the letters abcd we mean all of their possible arrangements:
Using the fundamental concept of counting, If something can be chosen, or can happen, or be done, in m different ways, and, after that has happened, something else can be chosen in n different ways, then the number of ways of choosing both of them is m n.
The first space can be filled by any one of the four letters. The second space can be filled by any of the remaining 3 letters. The third space can be filled by any of the 2 remaining letters and the final space must be filled by the one remaining letter. The total number of possible arrangements is therefore 4 × 3 × 2 × 1 = 4!
Permutations of all
The number of ways of arranging n unlike objects in a line is n! (pronounced ‘n factorial’). n! = n × (n - 1) × (n - 2) ×...× 3 × 2 × 1
Which is also the number of permutations of n different things taken n at a time is n!.
Five different books are on a shelf. In how many different ways could you arrange them?
Answer. 5! = 1 2 3 4 5 = 120
There are 6! permutations of the 6 letters of the word square.
a) In how many of them is r the second letter? _ r _ _ _ _
b) In how many of them are q and e next to each other?
Solution. a) Let r be the second letter. Then there are 5 ways to fill the first spot. After that has happened, there are 4 ways to fill the third, 3 to fill the fourth, and so on. There are 5! such permutations.
b) Let q and e be next to each other as qe. Then we will be permuting the 5 units qe, s, u a, r.. They have 5! permutations. But q and e could be together as eq. Therefore, the total number of ways they can be next to each other is 2 5! = 240.
The number of ways of arranging n objects, of which p of one type are alike, q of a second type are alike, r of a third type are alike, etc is:
In how many ways can the letters in the word: STATISTICS be arranged?There are 3 S’s, 2 I’s and 3 T’s in this word, therefore, the number of ways of arranging the letters are:
Circular arrangements
The number of ways of arranging n unlike objects in a circle:
Direction matters -> (n – 1)!
Direction doesn't matter -> ½ (n – 1)!
Eight people go to a party. How many different ways can they be seated?
Clockwise and anti-clockwise are different : (8-1)!=7!=5040
Anti-clockwise and clockwise arrangements are the same. Therefore, the total number of ways is ½ (8-1)! = 2520
Permutations of less than all
The number of ordered arrangements of r objects taken from n unlike objects is:

For example, imagine putting the letters a, b, c, d into a hat, and then drawing two of them in succession. We can draw the first in 4 different ways: either a or b or c or d. After that has happened, there are 3 ways to choose the second. That is, to each of those 4 ways there correspond 3. Therefore, there are 4X3 or 12 possible ways to choose two letters from four.
ab means that a was chosen first and b second; ba means that b was chosen first and a second; and so on.
”The number of permutations of n different things taken r at a time.”
We will symbolize this as : 
The lower index 2 indicates the number of factors. The upper index 4 indicates the first factor.
In general,

Combinations
Combinations with repetition
An arrangement of r objects, WITHOUT regard to ORDER and without repetition, selected from n distinct objects is called a combination of n objects taken r at a time.
The number of such combinations is denoted by

How many different committees of 4 students can be chosen from a group of 15?
Answer: There arepossible combinations of 4 students from a set of 15.
committees.
3 marbles are drawn at random from a bag containing 3 red and 5 white marbles. How many different draws would contain 1 red and 2 white marbles?
This would be a combination problem, because a draw would be a group of marbles without regard to order. It is like grabbing a handful of marbles and looking at them. Ways to pick 1 Red from 3 Red =![]()
Ways to pick 2 White from 5 White =![]()
Total no. of ways = ways X ways = 30
Combinations with repetition
The number of combinations with repetition can be calculated as:

For example, if you have ten types of donuts (n) on a menu to choose from and you want three donuts (k) the number of ways to choose can be calculated as:
There is an easy way to understand this: Let the types of donuts be represented by | and the number of donuts each type was ordered be represented by the number of ∙ Now lets say the first type was ordered 2 times and the 5th type was ordered 1 time making a total of 3 donuts ordered. The corresponding diagram will look like :
That is, 2 donuts (dots) after 1st type (|) and then no dots for 2nd, 3rd, 4th and then 1 donut for 5th type and then again no donuts for the rest. Now the number of dots in our problem will always be 3 and the number of |will always be 10. But the first slash will never move. That is we will never have a situation like this:
because this would not mean anything. So basically we are left with 9 |’s and 3 ∙’s
To generalize, we will have ( n-1) |’s and k ∙’s
Number of ways to arrange this will be:
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possible combinations of 4 students from a set of 15.
committees.






