Permutations are for lists (order matters) and combinations are for groups (order doesn't matter). You know, a "combination lock" should really be called a "permutation lock". The order you put the numbers in matters.

How can you determine if you need to use a combination or permutation to count the number of outcomes?

If the order doesn't matter then we have a combination, if the order do matter then we have a permutation. One could say that a permutation is an ordered combination. The number of permutations of n objects taken r at a time is determined by the following formula: P(n,r)=n!

What is the use of permutations and combinations?

A permutation is used for the list of data (where the order of the data matters) and the combination is used for a group of data (where the order of data doesn't matter).