COST ACCOUNTING
INFORMATION FOR DECISION MAKING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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certainty
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optimizing
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risk
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satisficing
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Detailed explanation-1: -When probabilities can be assigned to the occurrence of states of nature in the future, the situation is referred to as decision making under risk.
Detailed explanation-2: -When uncertainty exists, the probabilities of alternative outcomes cannot be determined and future outcomes are unknown.
Detailed explanation-3: -The design phase involves finding or developing and analyzing possible courses of action. These include understanding the problem and testing solutions for feasibility.
Detailed explanation-4: -The most widely used decision-making criterion under risk is expected value. A decision criterion in which the decision payoffs are weighted by a coefficient of optimism is known as the minimax regret criterion.