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Describe and use techniques that apply to decision making under uncertainty.
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- Making decisions under conditions of uncertainty involves what factor?If it is impossible to acquire sufficient information to make an informed decision, what can be the least risky option to take? Using gut feelings Not doing anything Do something because something is always better than nothing. Let someone else make the decision.Select correct and appropriate answer.
- In the field of financial management, it has been observed that there is a trade-off between the rate of return that one earns on investments and the amount of risk that one must bear to earn that return. a) Draw a set of indifference curves between risk and return for a person that is risk-averse (a person that does not like risk).Apply the PACED decision model to a purchase decision that you recently made. List all five steps and include an explanation of the considerations you made at each step. What was the outcome?Evaluate wrong options as well.
- Many clothing stores purchased new fashions from clothing manufacturers back in the Fall, expecting to sell new fashions to consumers this Spring. Because of the pandemic, however, people are not shopping for new clothing fashions as much as the clothing retailers had expected. So these stores have on hand lots of new clothing, just sitting on their shelves, going unsold. The question for these retailers is what to do with this clothing. One option is to hang on to it and hope to sell it to consumers next year. Another option is to sell the clothing now to so-called “deep discount retailers” such as Beall’s, Marshall’s, T.J. Maxx, and Ross Dress for Less. The problem with selling to deep discount stores is that the clothing retailers will probably receive less money than they paid to get the clothing from the manufacturers. Explain whether it makes good economic sense for clothing retailers to sell their unsold clothing to deep discounters for less than they paid for it. Identify the…In what way does strategic decisions different from other kinds of corporate decision?Describe the Rational Decision making Process?
- Need second opinion on the answer I chose.Paul hires Amy to manage his bakery shop. The following table gives the shop's profits (without subtracting payments to Amy) under 3 different levels of Amy's effort and two different states of the world (good and bad weather). There is an 80% probability that the weather would turn good. Bad weather (20%) Good weather (80%) Low Effort 200 400 Medium Effort 400 800 High Effort 800 1000 The cost of low effort is $10, medium effort $20 and high effort $40. Paul offers a fixed salary of $100 and bonus B if revenue is equal to or higher than $800 and nothing otherwise. What should be the minimum value of B so that Amy would put high effort?How is the Rational decision making a complex process?