Dq 3 Week 1

As a manager, what are some benefits of applying probability concepts to solve business-related problems? Would business decisions suffer without probability concepts? Explain.

A benefit of applying probability concepts to business problems is that it allows you to measure aspects of ways business is conducted. For instance, if a new restaurant was opening up a manager may have to determine which product (i.e. Pepsi or Coke) would sell better in their particular restaurant. They would need to look at the population as a whole and measure preferences of the population in the area. To add to this, I have found that usually in the South it’s more difficult to find Pepsi products being the main fountain drink in restaurants. It is usually Coke that is the main fountain drink in restaurants there because that is what is more preferred in the area. However, in the area in which I live Pepsi is far more popular so a lot of the restaurants here serve it instead. Therefore, a manager could measure the probability of each of these products being sold in their new restaurant to make the choice on which to choose as the main fountain drink in the store.

I do believe that businesses would most definitely suffer if they were to not use probability in making decisions. Just recently where I work, I helped my manager make a decision on advertising and we used a lot of statistical data from the area. He had been focusing more on the telephone directories than anything else which no one really uses as much anymore since the Internet is available to most homes. Our business had been steady but nothing extravagent. I told him he needed to give radio advertising a try but he was cautious because of the high costs of doing so. We have a very popular radio station here which everyone (including businesses) listens to in the stores, cars and at home. The radio station was doing an auction and was taking items in to auction off. In exchange, you get advertising in the amount of the...