This means they set medium term goals may be up to five years. This requires that they make detailed and precise judgments, so that their medium term goals are met. This has made the methodology require sophisticated business statistical applications. (Statistical Thinking for Managerial Decisions) Long-term planning in business normally makes it necessary to make estimations regarding the future and extrapolations of the past, is used for this. The trends can be identified, but these may be accurate for a short time and in it lay the danger of forecasting by extrapolation of the past, since data cannot be expected to forecast something that has not happened. It is here that the importance of strategic planning has relevance. Strategic planning adds more control into a situation where the outcome is more likely to be taken on the probable occurrence of an event or set of events in the near or distant future. This only implies that forecasting should not be the only prop for Organizations as if it is so it will leave them open to the effects of change. (Forecasting and Trends)
An important area in the field of long-term planning is that of investment. Organizations need to tackle the problems arising out of committing funds to purchase of land, building, and machinery and so on and so forth, looking forward to being capable to earn more income than what was invested by way of funds. To take care of this decision-making too Organizations need Business Statistical models capable of handling the amount of fund outflows and inflows, how long these investments are required, the amount of risk involved and the cost of securing these funds. We can list the main stages of capital budgeting as forecasting investment needs, identifying projects to meet needs, assessing the options, opting for the best alternatives, expending the funds and monitoring the projects. (Investment Appraisal)
Therefore we see that in today's world good decisions are taken on the basis of data by almost all Organizations. In any business environment a wide variety of data is available for assessment using analytical insight. Business managers and professionals are have to now make decisions using data and justify it and so require statistical mode-based support systems for decision making. (Statistical thinking for Managerial Decisions) This requires the use of permutation and combinations in their analysis of data and in the statistical models that support. Permutation and combinations provide the scope of looking at different scenarios in a business environment. The chance that a particular event will occur or occur with a certain degree of certainty is assisted using permutation and combinations. This makes the decision making easier and also more certain.
Furthermore decisions can be justified by the use of models using correct permutations and combinations. True there is an element of chance in this and what was planned need not happen or may go awry. This is where the use of the right set of permutation and combination models reduces the risk of this happening. Business managers using the necessary data and the right set of permutation and combination models to analyze and solve problems in their decision reduce to a very large extent the possibility of things going wrong. Skill sets that give them this capacity take Organizations a long way in this competitive world. Business Statistics along with permutations do not have a long history in the business world. Gut sense and intuition were the ways of the old. Having come into the business world they have proved their utility in various activities of an Organization. Their value portend that they are here to stay and any Organization puts at risk its very existence should it choose to ignore them and their value in the areas of decision making, where they are indispensable.
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Statistical Thinking for Managerial Decisions" National Science Foundation. Retrieved at http://home.ubalt.edu/ntsbarsh/Business-stat/opre504.htm. Accessed on 11/11/2004
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Using Data" Retrieved at http://www.bized.ac.uk/timeweb/reference/. Accessed on 11/11/2004.
Forecasting and Trends." Retrieved at http://www.bized.ac.uk/timeweb/reference/using_trends.htm. Accessed on 11/11/2004.
Investment Appraisal." Retrieved at http://www.bized.ac.uk/timeweb/reference/using_experiments.htm. Accessed on 11/11/2004