For example, you have a bag of 12 uniquely colored marbles. Pick 5 marbles out of the bag. This set of 5 marbles is one pick. Toss the marbles back in the bag. Pick 5 marbles again, making sure that the selection differs from the first pick. So on and so forth. The question is, how many unique picks of 5 marbles can you make?
In general, all the ways you can pick r items out of n items is called the combination of n things taken r at a time (or r-combination). Notation:
            n!
C(n,r) =  --------  reads "The combination of n things taken r at a time" or
         (n-r)! r!         "n choose r"                        _
                                                             n^r
Since n!/(n-r)! is the falling powers of n^r,    C(n,r) =    ----    
                                                             r! 
An r-combination is the number of all possible unordered subsets of r objects 
taken from a set of n objects. You can consider C(n,r) in terms of sets:
Let S = {1,2,3,4}
C(4,0) = 1 possible subset of size  0: {}
C(4,1) = 4 possible subsets of size 1: { {1}, {2}, {3}, {4} }
C(4,2) = 6 possible subsets of size 2: {{1,2},{1,3},{1,4},{2,3},{2,4},{3,4}}
C(4,3) = 4 possible subsets of size 3: { {1,2,3}, {1,2,4}, {1,3,4}, {2,3,4} }
C(4,4) = 1 possible subset of size  4: { {1,2,3,4} }
The formula C(n,r), 0 <= r <= n, yields the same results:
  C(4,0) = 4!/(4!0!) = 1 
  C(4,1) = 4!/(3!1!) = 4 
  C(4,2) = 4!/(2!2!) = 6 
  C(4,3) = 4!/(3!1!) = 4 
  C(4,4) = 4!/(4!0!) = 1 
Observations:
                 n
 Given |S| = n,  [   C(n,r) = |P(S)|.
                 r=0
 The ways to pick r objects out of n is equivalent to the ways to pick 
 n - r objects to be left behind; thus, C(n,r) = C(n,n-r). 
 C(n,n) = 1
 C(n,1) = n 
 C(n,0) = 1 
For example, let S={1,2,3,4}. P(4,2) is the number of permutations of the subsets of size 2 taken from S. Since the number of subsets is C(4,2) and a set of size 2 has 2! bijections, P(4,2) = 2! * C(4,2). Thus, P(4,2) = 4!/2!, which is 4 to the falling powers of 2. The 12 permutations of P(4,2) are shown here:
 { (1,2), (1,3), (1,4),
   (2,1), (2,3), (2,4),
   (3,1), (3,2), (3,4),
   (4,1), (4,2), (4,3) }
P(4,2) = 12.
Formula: 
                            n!
                P(n,r) =  ----- 
                          (n-r)!
                           _
                       = n^r   reads "n to the falling powers of r"
 C(4,2) = 4*3/2 = 6. 
 P(4,2) = 4*3 = 12. 
 Since arrangement does not matter, tuples such as (1,2) and (1,2) are counted 
 as 1 item:
 { (1,2), (1,3), (1,4),
   (2,3), (2,4), (3,4), }
A Caesar cipher is a permutation over the letters of the alphabet where each 
plaintext letter is translated to the letter a fixed number of letters after 
it in the alphabet. A cipher that maps each letter to its neighbor three 
letters to the right is shown here: 
Plaintext    A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Ciphertext   X Y Z A B C D E F G H I J K L M N O P Q R S T U V W
f("APPLES") = "XMMIBP" 
The total number of permutations of S is the number of bijections from S -> S, 
which is |S|!. For an alphabet of 26 letters, the number of permutations is 26!.
Observations:
C(n,r) is P(n,r) divided by r!.
           _
P(n,n) = n^n = n!
P(n,0) = 1
P(n,1) = n
 
C(7,7) = 1
C(7,1) = 7
C(7,0) = 1 
P(7,4) = 7*6*5*4
P(7,7) = 7!
P(7,1) = 7
P(7,0) = 1
Example 1.
Count the ways you can arrange 4 out of 10 people in a row. This is P(10,4),
which is 10!/6! = 10*9*8*7 = 5040. 
Example 2.
The ways you can pick 4 out of 10 people to serve on a committee is C(10,4).
C(10,4) = 10*9*8*7/(4*3*2) = 210
The ways to pick 6 people out of the 10 to NOT serve on a committee is C(10,6).
C(10,6) = 10*9*8*7/(4*3*2) = 210
Example 3. The ways you can pick 5 cards out of a deck of 52 cards is an
r-combination since order does not matter. This is C(52,5) = 52^5_/5! 
                                                    = 52*51*50*49*48/5*4*3*2
                                                    = 52*51*10*49*2
                                                    = 2,598,960 
 
Example 4. 
The number of 5-card hands that are flushes is a product of r-combinations.
This is the number of ways to pick 5 cards from the same suit. In a deck
 of 52 cards, there are 4 suits and 13 faces (13 faces per suit thus 4*13=52). 
 You first pick a suit. Then you pick 5 faces from that suit.
     C(4,1)C(13,5)
Example 5.
     C(13,1)C(4,4)C(48,1)   
Example 6. 
        C(13,1)C(4,2)C(50,3) = 13*6*(50*49*8)  
Note: the expression C(13,1)C(4,1)C(3,1)C(50,3) is not correct. Why? Because 
 that expression
 is incorrectly assuming that position matters. E.g., C(4,1)C(3,1) = 12 
 whereas C(4,2) = 4*3/2 = 6.
Example 7.  
How many bit strings of length 10 contain 3 '1's?
(Think of this as the number of ways you can put a '1' into a bit string.) 
    C(10,3) 
Example 8.  
   a) the string AB?
    Glue AB into a single item. There are 6 remaining items. There are thus 7!
    permutations of all items:
    P(7,7) = 5040
    b) the string ABC?
    Glue ABC into a single item. There are 5 remainining letters. Thus,
    there are 6! possibilities:
    P(6,6) =  720
    c) the string BA and EDC?
    Glue the substrings into 2 items. There are thus 5 total items:
    P(5,5) = 5! = 120
Example 9.  Divide all possible arrangements by 7 to eliminate duplicates. Thus, 7!/7 = 6!
 
Example 10.  
A group of 100 potential jurists are grouped as follows: 
Panel A=45 people; Panel B=35; Panel C=20
How many ways are there to select 12 jurists if 5 are selected Panel A, 4 are selected from Panel B, and the other 3 are selected from the Panel C?
Apply the Product Rule to all possible arrangements of the 3 panels:
C(45,5) * C(35,4) * C(20,3)