Lesson 1 Business Logic

This document introduces business logic from a business administration perspective, defining business, logic, and business logic while highlighting their importance in decision-making and operational efficiency. It discusses the role of logical reasoning, types of reasoning, and practical applications of business logic in various sectors, including banking, retail, and logistics. The document emphasizes that effective use of business logic is essential for enhancing customer satisfaction, profitability, and competitiveness in the evolving market.

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Lesson 1 Business Logic

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Princess Juliane Reyes

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Business

Logic

LESSON 1: INT RO DUCT IO N

This module will deal on business
logic on a business administration
perspective. Definition of business
will be discussed as well as an
introduction to logic. Correlation on
the use of logic in business decision
will be introduced.

LESSON 1: INT RO D UCT IO N

Definition of Business
• A business is defined as an organization or enterprising entity engaged in
commercial, industrial, or professional activities.
• Businesses can be for-profit entities or non-profit organizations.

• Business types range from limited liability companies, sole proprietorships,

corporations and partnerships.
• There are businesses that run as small operations in a single industry while
others are large operations that spread across many industries around the world.
Definition of Logic
• A proper or reasonable way of thinking about or understanding something

• A science that studies the principles of correct reasoning.

• The process of making inferences based upon observed patterns, or simple

repetition.
• The study of truths based completely on the meanings of the terms they
contain
• Logic is a process for making a conclusion and a tool you can use.
Definition of Business Logic
• Business logic is the structured framework of rules and processes that dictate
how a business functions. It translates real-world business rules into systematic
operations, guiding decision-making, workflow automation, and problem-
solving.
• In the Philippines, businesses across industries—retail, finance, logistics, and
even small enterprises—rely on business logic to streamline operations and
make data-driven decisions. From local sari-sari stores to large corporations like
Jollibee, BDO, and Lazada, structured business logic ensures efficiency,
profitability, and customer satisfaction.
Importance

• Improves Decision-Making: Provides a logical framework for analyzing problems and making
strategic decisions.
• Enhances Efficiency: Streamlines business processes, reducing errors and redundancies.
• Ensures Consistency: Maintains uniformity in business operations across different departments.

• Supports Scalability: Helps businesses grow by defining rules that can be automated and
adapted.
• Reduces Risks: Identifies potential issues through logical analysis and predictive modeling.
• Business Logic in Action:
o Philippine banks and fintech platforms like BDO, GCash, and Maya use business logic to
process financial transactions.
o If a customer deposits money via a mobile app, business logic verifies the transaction, checks
account limits, and updates the balance in real time.
o Automated fraud detection systems apply business rules to flag suspicious transactions, such
as multiple large withdrawals within minutes.
• Why It’s Important:
o Ensures transaction security and compliance with Bangko Sentral ng Pilipinas (BSP)
regulations.
o Prevents unauthorized transactions, enhancing customer trust.
• Business Logic in Action:
o Jollibee's mobile app uses business logic to process orders.

o If a customer orders Chickenjoy for delivery, the app applies rules like checking store
availability, estimated cooking time, and nearest delivery riders.

o Discounts and promos (e.g., “Spend ₱500 and get ₱50 off”) are applied using rule-based
automation.

• Why It’s Important:

o Reduces errors in manual ordering and ensures a smooth customer experience.

o Optimizes inventory management by automatically deducting sold items from stock levels.
Logical Reasoning in Business Decision-Making

Logical reasoning is a structured approach to analyzing

situations, solving problems, and making sound business
decisions. It involves evaluating information, identifying
patterns, and applying logic to arrive at rational
conclusions.
Types of Logical Reasoning in Business:

1. Deductive Reasoning: Using general principles to derive specific conclusions (e.g.,

“All high-quality products have strong customer demand. Our product is high-
quality; therefore, it will have strong demand.”).
2. Inductive Reasoning: Drawing general conclusions from specific observations (e.g.,
“Over the past three months, customers have preferred eco-friendly packaging. It is
likely that eco-friendly packaging will continue to be in demand.”).
Deductive Reasoning Example: SM Malls and Retail
Business
• Scenario:
• SM management observes that holiday seasons drive more foot traffic and sales.
• They use this knowledge to increase mall operating hours, offer Christmas
promotions, and expand inventory during peak seasons.

• Conclusion: Since past trends show increased customer visits, increasing

operational capacity is expected to boost sales.
Inductive Reasoning Example: Local Coffee Shops (e.g., Bo’s
Coffee, The Coffee Bean & Tea Leaf, Small Cafés)
• Scenario:
• A café in Baguio City notices that most tourists order hot chocolate and local Arabica coffee
during the cold months.
• After gathering customer data, they introduce a special winter menu with more hot drinks and
Filipino delicacies like bibingka and puto bumbong.

• Conclusion: Since customers prefer warm drinks in cold weather, it is likely that a
winter menu will drive sales.
Inductive Reasoning Example: Local Coffee Shops (e.g., Bo’s
Coffee, The Coffee Bean & Tea Leaf, Small Cafés)
• Scenario:
• A café in Baguio City notices that most tourists order hot chocolate and local Arabica coffee
during the cold months.
• After gathering customer data, they introduce a special winter menu with more hot drinks and
Filipino delicacies like bibingka and puto bumbong.

• Conclusion: Since customers prefer warm drinks in cold weather, it is likely that a
winter menu will drive sales.
Role of Business Logic in Automation and AI

• Automation and artificial intelligence (AI) rely on business

logic to execute tasks efficiently and make intelligent decisions.
Business logic provides the foundation for automated
workflows, machine learning models, and decision-support
systems.
Key Roles of Business Logic in Automation and AI:

• Automating Repetitive Tasks: Business rules help automate routine processes like
invoicing, customer support, and supply chain management.
• Enhancing AI Decision-Making: AI models use business logic to analyze data, detect
trends, and make predictions.

• Optimizing Business Processes: Automation tools apply logical frameworks to improve

efficiency and reduce operational costs.

• Ensuring Compliance and Accuracy: Business logic enforces regulatory requirements and
ensures consistency in AI-driven decisions.
Automated Loan Approvals (GCash’s GLoan, CIMB
Bank, UnionBank)
• Business Logic in Action:
• When a customer applies for a loan via GCash’s GLoan or CIMB Bank, the system evaluates
their creditworthiness.
• Business rules check factors like transaction history, salary deposits, and credit score before
approving or rejecting the application.

• Outcome:
• Faster loan approvals compared to traditional banks.
• Reduces the risk of lending to customers with a history of non-payment.
AI-Driven Logistics (J&T Express, Lalamove, Shopee
Xpress)
• Business Logic in Action:
• Lalamove uses AI and business logic to assign deliveries to nearby riders.
• Factors considered: distance, traffic conditions, rider availability, and package size.
• The app automatically calculates the fastest delivery route and optimal rider assignment.

• Outcome:
• Speeds up delivery time and reduces operational costs.
• Ensures customers receive their parcels efficiently.
Smart Inventory Management in Supermarkets
(Puregold, Robinsons Supermarket)
• Business Logic in Action:
• Puregold uses inventory management systems that automatically reorder stocks when supply runs
low.
• If stock levels of Lucky Me! Pancit Canton go below 50 packs, the system triggers a reorder
request to suppliers.
• Expiry dates are tracked, and soon-to-expire products are discounted.

• Outcome:
• Reduces out-of-stock situations and prevents overstocking.
• Minimizes food waste by selling near-expiry items at a discount.
Business logic is deeply embedded in Philippine businesses, from small
sari-sari stores to giant corporations. Whether through logical reasoning in
decision-making or automation in banking, retail, and logistics, business
logic plays a crucial role in improving efficiency, customer satisfaction,
and profitability. As Philippine businesses continue to embrace digital
transformation, leveraging business logic will be key to staying
competitive in a rapidly evolving market.