Simulation of Management Resource using Monte Carlo Method and Bayes' Estimation

Abstract

In order to achieve business objectives, companies must utilize resources such as people, goods, money and information assets. For the pharmaceutical industry, providing information related to the proper use of drugs is an important management resource. The purpose of this study was to assist management decision-making by simulating appropriate amounts and allocation of resources. We segmented customers and used Bayesian estimation to calculate the posterior probability distribution of product shares, and then used Monte Carlo simulation to estimate the probability of achieving business objectives based on resource amounts. We also used multivariate analysis to explore efficient activities based on resource allocation. This model was able to simulate appropriate amounts and allocation of resources. Based on its characteristics, this framework is not only applicable to the pharmaceutical industry but also to other industries, and it is believed that this model can be helpful for probability-based decision-making in the field of management.