Decision of Uncertainty

Decision of Uncertainty

Uncertainty exists in all facets of everyday life, from business to one’s home life. Decisions are made based on uncertainty and sometimes the wrong decisions are chosen. Using statistical methods to arrive at decisions assist individuals and business in making the most correct decision from data provided. The scenario presented shows how a business can use data readily available to become more certain of its decision. Kids Day Out is a daycare center that accepts children ages six weeks to six years old. With the current economic trends, increasing unemployment rates, and increasing state minimum wage rates, Kids Day Out is considering expanding the ages accepted to include children up to twelve years of age.

Scenario

In recent light of the state of Illinois minimum wage increase as of July 1, 2010, Kids Day Out, a daycare center, is uncertain if increasing the weekly rates will decrease enrollment or stay the same. The minimum wage increased from $8.00 an hour to $8.25 an hour. Currently Kids Day Out employs ten people with six earning minimum wage and the remaining four above minimum wage. It is necessary to increase weekly rates by $1 a day for each child to keep the facility operational. Many other daycares are “seeing a decline in the number of children registered due to a loss or reduction in family income” (Cardarella, 2009, para. 3). With the fear of decreased enrollment, the daycare needs to know by expanding the ages accepted at the daycare, if enrollment would remain the same or increase. By accepting older children, increased revenues is an option Kids Day Out is expecting, however, in light of the economy and higher unemployment rates, it would hopefully capture the same amount of older kids that would be lost in the younger kids by parents who are unemployed and unable to pay for childcare.

Research

Kids Day Out researched the available data from KidsCount.Org (2009) at county and state level to...