Efficient Rate Example and The Payback Period for Projects
Problem
Admiral Bills believes that the boxes of cake mix are not being filled using the most
efficient rate.
Methodology
First I used normal
Sammys Exterminators Regression Example
Regression One
Salary = 44,615 + 15,206 (Gender)
(51,525) (3,778)
(5,604) R^2=0.021= 2.1%
Sammy pays $44,615 + $15,206 if you are a man.
Regression Two
Salary =
Mimis Orlando Shuttle Calculating Profit Example
Problem
Mimis Orlando Shuttle is losing money because of a recent fuel crisis and a problem
with no-show reservations. She doesnt overbook or charge a
Hogan Industries Probability Example
Problem
The CEO of Hogan Industries, Holly Hogan, believes that there must be a better way
to save money on expensive valves, while keeping the risk of catastrophe
The Mean of a Binomial
o The mean of a Binomial, in addition to being the sum of (x * P(x) is also simply n*p
And the Standard Deviation in addition to being the square root of the sum of (xmean) squa
Uniform Distribution
The probability of the second hand being between any 2 adjacent numbers would be 1/12. The
collection of the outcomes of the second hand is a uniform distribution.
o In a Uniform
Tree Statistics
o Lets take a look at a TreeORIGINAL EXAMPLE
The Addition Rule
o The probability that one or the other of two events will occur is:
o P (A or B) =P(A) + P(B) - P(A and B)
o This subtra
Hogan Industries Solution and Calculation
a. The yearly cost of maintaining the current system is $142,985.92
= (cost of valves including labor + initial cost per year) =
($130,985.92 + $12,000)
b. Fo
The Probability Rules Common Mistakes
1. Using the wrong formula, especially since the Multiplication Rule is used for And &
our intuition is And indicates the need for the Addition Rule
2. Adding rat
Probability Distributions
As (perhaps) the name suggests, a Probability Distribution is a collection
(distribution) of the probabilities of events occurring.
o Better stated, a collection of the event
Probability Distribution Rules:
1.Probabilities cannot be negative, nor can they be greater than one
2.The outcomes that can occur cannot overlap - Mutually Exclusive
3.All the outcomes must be accoun
Questions & Answers to Proportions
o What proportion of the drivers failed the test
o P (F)
=
.23
o What percentage of the drivers who Passed (77) the test are Drunk (5)
o P (D | P) = 5/77= .065
o Wha
Rolling Dice Example - Conditional Probability
If we are to roll 2 dice and roll a 1 with the first one, what is the probability we roll a
1 with the second one?
o Is it 1/5 or maybe 0/5? or 0/6? or 1
Probability Distribution
The MEAN of a Probability Distribution is the sum of (each value times its respective
probability) (x * P(x )
The STANDARD DEVIATION of a Probability Distribution is The Squar
The Central Limit Theorem
Assume you are to flip coins.
Heads = 1
Tails = 0
If you toss a coin once, what would the AVERAGE be: either 0 or 1.
If you toss a coin twice, what could the AVERAGE be: it c
Testing in Decision Making:
o What percentage of the drivers who Passed the test are Drunk?
o P (D | P)
=
?
o What proportion of the drivers failed the test
o P (F)
=
?
o What proportion of the driver
Statistic Definitions
Data - numeric information we collect through measurement, observations, or counts.
Experiment act of obtaining data
A simulation uses a mathematical model to reproduce condition
Standard Deviation in Probability Distribution
Why the confusing new way?
Using the old method, to calculate the mean we would need to list all (123)
numbers, add them up and divide by 123.
There are
Probability of Success
o Using the newly discovered Binomial formula, find the Probability Mary gets 4 As, 3As
and 2 As
o P(4) =5*.8*.8*.8*.8*.2 = .4096
o P(3) =10*.8*.8*.8*.2*.2 = .2048
o P(2) =10*.8
Example of Good Value Proposition - ABC Company can improve its market
share by a minimum of 4 percentage points in a one-year period in its San
Francisco & Dallas markets by implementing our customer
1. Inbound Telemarketing (Prospect calls the company) This is a source
of locating prospects whereby the prospect calls the company to get
information.
2. Outbound Telemarketing (Salesperson contacts
Gathering Pre-Call Information - About the Company:
1. Type of Business
2. History of Business
3. Current Strategy & Performance
4. Number of Employees
5. Target Markets Served
6. Products & Services
Sales Dialogue - Business conversations between buyers and sellers that occur as salespeople
attempt to initiate, develop, and enhance customer relationships. Sales dialogue should be
customer-focused
Written Sales Proposals A complete self-contained sales presentation on paper, often
accompanied by other verbal sales presentations before or after the proposal is delivered.
Example: A response to a