Question

What is probability? Describe classical, empirical, and subjective probability, and provide "real-world" examples of each. How can each of these types of probability apply to the business world? Do you think any one type is more useful in business than the others? Why or why not?

Answer 1

1.Classical Probability is the ratio of likelihood to total number of outcomes. here each event has equal priority.

for example getting a number 2 on 6 faced dice.

2.Empirical probability is the ratio of favorable cases of particular event to total cases.

for example: A fair die is rolled for 100 times, probability of getting 2 for 10 times.

3,

Subjective probability is the judgement of outcomes based on the past experience

for example:You’re taking your dog to the vet today, and based on past experience you’re pretty confident you’ll need over $100 for the bill.

As per me ....Subjective probability is more relevent to business guys, based on previous experience or experienced peoples opinion they are going to increase or decrease production.

Based subjective probability they are announcing offers on particular products.

Based on subjective probability they are releasing seasonal products like rain coasts, umbrella or some kind of medicines etc