Explain the process of making decisions with uncertain information
What will be an ideal response?
Many decisions involve a choice from among a small set of decisions with uncertain consequences. Such decisions can be characterized by defining three things.
1. The decision alternatives
2. The outcomes that may occur once a decision is made
3. The payoff associated with each decision and outcome
Outcomes, often called events, may be quantitative or qualitative. The payoff is a measure of the value of making a decision and having a particular outcome occur. Payoffs are often summarized in a payoff table.
You might also like to view...
Which of the following allows a firm to maintain control over the service level and obtain more dedicated and knowledgeable selling?
A) selective distribution B) intensive distribution C) push strategy D) exclusive distribution E) pull strategy
In the BCG matrix, ________ refer to low-growth, high-share businesses or products
A) stars B) cash cows C) question marks D) dogs E) heroes
Youngblood Company borrowed $100,000 on a one-year, 10% note on October 1, 2012, with interest and principal to be paid at maturity. How much interest should Stone Company report on its income statement for the year ending December 31, 2013?
A) $10,000 B) $12,500 C) $ 2,500 D) $ 7,500
Identify and describe the principal contract interests a court may seek to protect