Application of Probability Theory in Small Business Management in Nigeria

Summary

In this research, the use of possibility theory by small and medium-sized enterprises (SMEs) in
Nigeria. It investigates the fraction of small businesses that fail despite government initiatives to
help them stay afloat. The world's poorest and most defenseless people are still considered to be
"have-nots" due to the widening gap between the haves and the have-nots caused by years of
economic stagnation. One prime example is the application of probability and statistical analysis
to the iterative process of trial and error.

The company is being examined in order to reveal the results and establish guidelines for prudent
investment in order to, hopefully, narrow the wealth difference. There was a survey quality to the
study. Research data is collected using a postal questionnaire and an interview guide. The study
analyzed data from 1,625 private companies in the southeast Nigerian state of Enugu. The
authors of the study reasoned that 345 small businesses provided a sufficient sample size to draw
valid conclusions. Evidence suggests that this is particularly true for smaller business
organizations that rely heavily on probability theory, as the specificity factor in probabilities is
intrinsic to modern business and is worsened by the information overload era in which various
ICTs are seen as crucial to the business world. The unusual nature of the fashion sector as a high-
risk endeavor increases the likelihood of failure for small fashion enterprises. Consequently, it is
crucial to have a solid grasp of probability theory and how to put it into practice.

An application of probability theory to the management of small enterprises in Nigeria is seen in

the report by Orga and Ogbo. Algorithms for handling decision-making challenges in small firms
and, among other things, during periods of significant market volatility in Nigeria rely heavily on
probability theory.

 Risk Assessment: This sort of decision-making is accompanied by the estimation and

measurement of risks through the application of probability theory. Small company
managers can make better decisions with less risk and more benefit when they analyze
probability.
  Resource Allocation: With the help of probability theory, we can optimize the allocation
of resources and also fine-tune their application. To maximize efficiency and
profitability, small firms in Nigeria might utilize probabilistic models to distribute limited
resources effectively. Acids and bases can be identified in a variety of ways; this study
compiles a comprehensive database of these methods, which includes color changes,
primary reactions, and universal markers.
 In financial management, the theory of probability is crucial because it provides a
framework for making investment decisions, capital budgets, and forecasts. Small
business operators can reduce financial risk and produce more accurate financial
estimates by employing probabilistic strategies.

In the long run, incorporating probability theory into the management of small enterprises in
Nigeria would lead to better decision-making, more efficient use of resources, and ultimately, the
success and sustainability of these businesses in the Nigerian market.

Innovations

 Theoretical Background in Probability: Unusually, it has also applied probability

theory to the management of small businesses in Nigeria. The effectiveness of this design
process lies in the fact that it offers a means of dealing with ambiguous issues, allowing
businesses to make crucial choices regarding the management of risks, the allocation of
resources, and the formulation of strategic plans.
 With a Nigerian Twist: The author used tiny enterprises in Nigeria to show how
probability theory works. To do this, he focused on the various hazards that Nigerian
entrepreneurs confront on a daily basis and how the laws of probability impact the
insurance policies that these companies utilize. A more substantial and efficient all-
terrain framework is achieved by this design adaption.
 Strategies for the Real World: The author of that piece provides a useful guide to
probability theory that Nigerian small businesses can use in their management approach.
In order to achieve this goal, it makes use of tools like data collecting and analysis, which
in turn permits decisions and empowers entrepreneurs by providing them with actionable
techniques for expanding their firm.
Limitations

 Generalizability: While this article has offered a wealth of trustworthy information for
small businesses in Nigeria, it may be challenging to directly apply the results to
companies outside of Nigeria, in countries or regions with different economic, cultural, or
regulatory contexts. As a result, it's probable that the present set of experiments is the
only one with specific constraints.
 Data truthfulness explains the properly functioning judgment basis given by probability
theory, which is the second aspect of data availability and reliability. It is possible that
small-scale businesses in Nigeria, particularly those in the informal and rural sectors, will
struggle to get their hands on trustworthy data, which could cause them to misapply the
theoretical ideas presented in the article.
 Complexity and Resource Constraints: Small business owners without experience,
training, or adequate resources may find probability theory to be extremely tough due to
its complicated mathematical formulae and methodologies. There may have been
omissions in the article regarding the difficulty company owners face in developing the
skills necessary to use probability theory in making decisions.

Final Remarks

Accidents happen all the time in small businesses. Changes also have an immediate impact on
small enterprises. Businesses in the fashion industry are more susceptible to shifts in consumer
tastes and preferences, making it harder to predict their level of success. While there may be
more jobs thanks to ICT (considering the amount of workers engaged in GSM operations), small
businesses have felt the negative effects of information overload, which has left many owners
and operators of these establishments little room to adapt to new circumstances.
Sales forecasting, production planning, inventory control, resource scheduling, quality control,
research, asset life estimation, shutdown decisions, new product development, asset acquisition
and replacement, and production control are all areas that could benefit from applying
probability theory. In areas where records are preserved, it is advisable to refrain from using
subjective approaches wherever possible. Lastly, in order to make probability theory more
applicable in real-world business settings, it should be required that all business students learn it.
References

1. Orga, C.C. and Ogbo, A.I., 2012. Application of Probability Theory in Small Business
Management in Nigeria. European Journal of Business and commerce, 4, p.12.