BUSINESS TERMS
Algorithm - A set of logical and mathematical operations performed in a specific sequence.
Bayes’ Theorem - A formula that is used to revise probabilities based on new information.
Bernoulli Process - A process with two outcomes in each of a series of independent trials in which the probabilities of the outcomes do not change.
Binomial Distribution - A discrete distribution that describes the number of successes in independent trials of a Bernoulli process.
Break-Even Point - The quantity of sales that results in zero profit.
Classical or Logical Approach - An objective way of assessing probabilities based on logic.
Collectively Exhaustive Events - A collection of all possible outcomes of an experiment.
Conditional Probability - The probability of one event occurring given that another has taken place.
Continuous Probability Distribution - A probability distribution with a continuous random variable.
Continuous Random Variable - A random variable that can assume an infinite or unlimited set of values.
Dependent Events - The situation in which the occurrence of one event affects the probability of occurrence of some other event.
Deterministic Model - A model in which all values used in the model are known with complete certainty.
Discrete Probability - Distribution A probability distribution with a discrete random variable.
Discrete Random Variable - A random variable that can only assume a finite or limited set of values.
Expected Value - The (weighted) average of a probability distribution.
F Distribution - A continuous probability distribution that is the ratio of the variances of samples from two independent normal distributions.
Independent Events - The situation in which the occurrence of one event has no effect on the probability of occurrence of a second event.
Input Data - Data that are used in a model in arriving at the final solution.
Joint Probability - The probability of events occurring together (or one after the...