There are 5 classes with 30 students each. How many ways can a committee of 10 students be formed if each class has to have at least one student on the committee?
I figured that we first have to choose 5 people from each class, so there are $10^5$ options. There remain total of 29*5=145 students to choose from, and we can fill remaining 5 spots any way we want, i.e., $\binom{145}{5}$ options. Thus, I thought answer would be $$10^5 \dot\ \binom{145}{5} $$.
Apparently this is the wrong answer. I can see how the inclusion/exclusion principle also leads to the right answer. That is, $$ {150 \choose 10}- 5{120 \choose 10} + {5 \choose 2}{90 \choose 10} - {5 \choose 3}{60 \choose 10} + {5 \choose 4}{30 \choose 10} $$
I don't see though what I overlooked and why my answer is different?
Any advice on when to simply use inclusion/exclusion and when to use other methods?
You are over counting.
Suppose, for a simpler example, you had two classes of three students $\{a,b,c\},\{d,e,f\}$ and have count ways to form distinct committees of three that includes at least one student from each class.
Your method would have you count ways to pick one from $\{a,b,c\}$, one from $\{d,e,f\}$, and one from the remainder. $\binom 31\binom 31\binom 41$ ways; $36$. So you could pick $a$ and $d$ then $b$ and form committee $\{a,b,d\}$. Another ways is to pick $b$ and $d$, then $a$, to form.... the same committee, $\{a,b,d\}$.
So rather, we count the total ways to select three from six and use PIE. That is $\binom 63-2\binom 33+\binom 03$, or $18$.
Which should equal ways to select two from $\{a,b,c\}$ and one from $\{d,e,f\}$ and ways to select one from $\{a,b,c\}$ and two from $\{d,e,f\}$. $\binom 32\binom 31\times 2$. Which is indeed $18$.