It is used as a normative tool, which tells how it should be revised our probability assessments when new information becomes available.

Bayes’ theorem is basically a process of revising the known possibilities of an event under the light of existing knowledge.

Bayes’ theorem provides a way for combining prior probabilities with probabilities obtained by other sources; revised or posterior probabilities.

In the use of Bayes’ theorem in solving a decision problem; firstly the prior probability distribution of the parameters to be estimated according to the subjective and objective information obtained is determined.

With the formula used in Bayes’s theorem, while the result of a given event is certain, the possibility of the causes of this result is investigated.