3 pages/≈825 words
Mathematics & Economics
A Decision of Uncertainty (Research Paper Sample)
Research statistical data in a business context that requires a decision. Use probability concepts to formulate a decision. Write a 700- to 1,050-word paper explaining your research methods and process for limiting the uncertainty in the decision. Address the following in your paper: - Include how you applied concepts to formulate your decision. - Include appropriate probability concepts and your application to find resulting data to limit uncertainty in this decision. - Identify each outcome from your statistical analysis, providing rationale for each. - Identify tradeoffs between accuracy and precision required by various probability concepts and the effect on your data. - Include the decision you made based on statistical data. Format your paper consistent with APA guidelines. source..
A DECISION OF UNCERTAINTY
(13 November 2012)
A DECISION OF UNCERTAINTY
Last year, I made I decision of taking a cruise, however, due to work and money constrains; I was supposed to take cruise in October. Through research and consideration of constrains, the best time to travel on a cruise was in September, but the problem is, this month forms the peak of hurricane. On the other hand, cruise does not refund money in case the cruise is cancelled as a result of hurricane.
To make an informed decision, I carried out research on my trip, where I got data from National Oceanic Atmospheric Atmosphere. More significantly my study was based on specific dates and hurricane durations. Based on the fact that I was supposed to take my trip on the month of September, my study concentrated on this time frame. After data collection, I focused on data interpretation to ensure my decision is accurate.
In data interpretation, my probability model was Bayes` theorem. This theorem determines confidence levels in every conclusion made based on available proves, which are based on subjective probability (Arsham 2000). Under subjective probability, opinion and information evaluation, apart from assessing probability of the outcome are very important. As an effect, Bayes` theorem is the best in determining confidence levels when it comes to determining whether to buy hurricane insurance or not.
Though there exist other analytical tools that can be used in deriving probability of any data, but Baye`s theorem is the best under this circumstance that needs subjective probability. For instance, I could have used hypothesis testing technique to test the probability of hurricanes, but this could have been possible if there are two professionals stating different probabilities. For instance, one could be stating that the probability of hurricane to happen is 5%, while the other stating that the probability of happening is 35%. Now, based on the fact that the variables in this case are undefined, then Bayes` theorem is the best (Pierre-Simon 1986).
Based on this theorem, I continued gathering information, and after contacting cruise line, I found that during hurricanes, only 5% are cancelled. After which, I set various variables upon which pro...
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