How does a business manager use probabilities for production planning?

Expert Solution

Probability theory is an important part of statistical theory which has a wide implication in the field of business and finance.

Probability theory is used by various fund managers in order to calculate long term and short term capital gains. It can be said that probability theory is used in in calculation of profit in respect with the required margin.

probability theory helps in measuring the risk exposures of different projects which are to be undertaken by the firm and since business cannot be operated without risk as there is some sort of market risk as well as project specific risk, that are specified in relation with business, the probability theory application is needed. So it can be said that it is used in risk evaluation of different projects.

Probability analysis is used in different types of calculation with regards to sales forecasting under different economic situations and it helps in proactive management of sales. Probability analysis has an application in scenario analysis as well, which is based upon different scenarios to calculate a given result.

So it can be said that the use of probability analysis is optimum in regards to decision making and various other aspects of business.

jeff jeffy answered 1 year ago

Please explain the 7 short run production costs and how might a business manager use this...

Please explain the 7 short run production costs and how might a business manager use this information. Or what it means to a business manager. 1) Total Fixed Costs 2) Ttotal Variable Costs 3)Total Costs 4)Average Fixed Costs 5) Average Variable Costs 6) Average Total Costs 7)Marginal Costs

short answers: A. In the short run, how does a business manager make wise use of...

short answers: A. In the short run, how does a business manager make wise use of the relationship between the marginal product, the average product, and the total product to help determine the point at which maximum output efficiency is achieved? B. Analyze each action below one at a time and explain if it is a short run action or a long run action, and explain why. 1. A firm builds a lunch room extension to its office building. 2....

how does long term financing planning support the goal of the financial manager

How can a business manager use regression to work backwards to evaluate the change in business...

How can a business manager use regression to work backwards to evaluate the change in business on productivity of a business?

Technology and Enterprise Resource Planning As an IT manager, discuss how your company will use Enterprise...

Technology and Enterprise Resource Planning As an IT manager, discuss how your company will use Enterprise Resource Planning (ERP) to integrate the various functions of an entity. What are the advantages of using ERP? In your discussion, please be sure to provide substantive explanation of what ERP is and give example(s) of ERP. Use APA throughout.

The J. Mehta Company’s production manager is planning a series of one-month production periods for stainless...

The J. Mehta Company’s production manager is planning a series of one-month production periods for stainless steel sinks. The forecasted demand for the next four months is as follows: Month Demand for Stainless Steel Sinks 1 120 2 160 3 240 4 100 The Mehta firm can normally produce 100 stainless steel sinks in a month. This is done during regular production hours at a cost of $100 per sink. If demand in any one month cannot be satisfied by...

Question 7 options: The J. Mehta Company’s production manager is planning a series of one-month production...

Question 7 options: The J. Mehta Company’s production manager is planning a series of one-month production periods for stainless steel sinks. The forecasted demand for the next four months is as follows: Month Demand for Stainless Steel Sinks 1 120 2 160 3 260 4 180 The Mehta firm can normally produce 100 stainless steel sinks in a month. This is done during regular production hours at a cost of $95 per sink. If demand in any one month cannot...

How can a business manager use Binomial probability distribution to assess a profitability of a new...

How can a business manager use Binomial probability distribution to assess a profitability of a new firm?

You are manager of a manufacturing business. Business is going very well and one production line...

You are manager of a manufacturing business. Business is going very well and one production line is at full capacity. You want to double the size of the production line. Engineering has estimated the cost and time required. It can be accomplished without effecting the existing production. The timing of the cash flows for the facility is as follows. Month Cash Flow 1 $ (20,000.00) 2 $ (45,000.00) 3 $ (55,000.00) 4 $ (70,000.00) 5 $ (75,000.00) 6 $ (80,000.00)...

the Audit Planning Process Internal control: 1. How does an Auditor use the Information form the...

the Audit Planning Process Internal control: 1. How does an Auditor use the Information form the Risk Assessment Procedures?

Question