# FIRST POST HA Probability is a numerical value that describes the chance that so

FIRST POST HA
Probability is a numerical value that describes the chance that something will happen. Probability can be expressed as a decimal, fraction, or whole number. There are three types of probability including: classical, empirical, and subjective. The classical and empirical probabilities are objective approaches. (Lind, Marchal, & Wathen, 2015)
Classical probability is based on the assumption that the outcomes of an experiment are equally likely. The probability of an event is found by dividing the number of favorable outcomes by the number of possible outcomes. It is only appropriate to use classical probability when all events are equally likely. A business example would be that there are seven males and three females that are interviewing to work at your same place of employment. The probability of your boss choosing a female is 3/10 or .3. (Lind, Marchal, & Wathen, 2015)
Empirical probability is based on the number of times an event occurs as a proportion of a known number of trials. Empirical probability is found by deciding the number of times the event occurs by the total number of observations. Empirical probability should be used to determine future events. (Lind, Marchal, & Wathen, 2015) For example, your research indicates that seventy-five out of one hundred small businesses fail within their first year. You can conclude that 75/100 or 3/4 of small business fail within one year. Therefore, you should make smart business decisions so that you do not fail as well. (Writer, 2013)
Subjective probability is when there is little or no experience or information on which to base a probability. There is no mathematical equation to calculate subjective probability. Subjective probability should be used for estimations based on your beliefs or feelings. For example, you can estimate the likelihood that your business will profit 10% more in 2017 than it did in 2016. (Lind, Marchal, & Wathen, 2015)
Lind, D. A., Marchal, W. G., & Wathen, S. A. (2015). Statistical techniques in business & economics. New York, NY: McGraw-Hill Education.
Writer, L. G. (2011, October 13). What Is the Importance of Probability Rules in a Business? Retrieved March 20, 2017, from http://smallbusiness.chron.com/importance-probability-rules-business-31263.html.