Assignment No # 02

Decision Modelling In Supply Chain

Submitted By:
Arqum Aftab Mirza
Registration No:
FA20-BBA-142
Submitted To:
Sir Intezar Hussain
Question :

Probability is the branch of mathematics concerned with

the assessment and analysis of uncertainty. The theory of
probability provides the means to rationally model, analyze and
solve problems where future events cannot be foreseen with
certitude. Discuss the statement in detail.

Answer:
Probability is the branch of mathematics concerned with the assessment and analysis of
uncertainty. The theory of probability provides the means to rationally model, analyze and
solve problems where future events cannot be foreseen with certitude. In numerous
managerial decision problems, especially those with strategic implications, it is not possible
to ascertain the results to be obtained when choosing a course of action. In such cases, if one
wants to act rationally —to maximize the chances of attaining one’s goal— it becomes
necessary to explicitly deal with the uncertainty posed by the problem. Thus, probability
theory is indispensable for rational decision making.

Probability is not statistics. Statistics is a distinct field of applied mathematics dedicated to

the collection, analysis, interpretation, and presentation of quantitative and qualitative data.
Statistics employs probability theory to make inferences about contingent events based on
sample information (statistical data) pertaining to those events or related events deemed of
relevance. Consequently, statistical models can be used only if the required data is obtainable.
This precludes their use in managerial situations where the problem under consideration is,
as often happens, unique and little or no empirical data is available or procurable. Probability,
however, can always be invoked when facing uncertainty, even in the absence of statistical
data.

Probability distribution is one of the tool that helps in decision making .probability distribution
is the one that have outcomes that come in a given range. It help in sales prediction, risk
assessment and to make the proper decisions. Futures sales are predicted through probability
distribution to get a maximum profit they also use forecasting that helps the companies to
achieve positive outcomes for their firms.