Qnt 561

All organizations are faced with decisions that can determine the future their company. In order to determine which decision is most likely to generate a successful outcome organizations use probability concepts to formulate the decisions based on the likelihood of success. The ABC IT Corporation has won a major contract with the state of Pennsylvania to sell computers and accessories in the state. ABC corporation is primarily an inside sales company, the executive board is deciding whether to have an outside sales force to work along side the inside sales team to help promote the contract locally and to increase sales. The issue the company faces is the cost of hiring and training the new sales team. In order to come to a reasonable conclusion empirical research will be conducted to determine whether the organization should make an investment in an outside sales force.

Concepts

The concept that researchers at the corporation used to formulate their decision was the empirical probability concept. The empirical probability concept is information that is based off of historical data. “ The empirical approach to probability is based on what is called the law of large numbers. The key to establishing probabilities empirically is that more observations will provide a more accurate estimate of the probability.” (Lind, Marcal, and Wathen 2008 pg143) In this particular case ABC Corporation looked at the financial information of their primary competitors when they added an outside sales force. The researcher had to look at the regions where ABC has lost market share and customers surveys. Looking at customer satisfaction surveys, the number one reason why ABC Corporation was losing their customers was because of lack of physical presence. The comment theme that kept coming up was there was no person that they (the customer) felt they could hold accountable if an error occurred while a project was being implemented.

Outcome from Statistical Analysis

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