Rational Managerial Decision Making Assumes That Decisions Are Made in the Best

question 66

Multiple Choice

Rational managerial decision making assumes that decisions are made in the best ________ interests of the organisation.

• A)economic
• B)payoff
• C)statistical
• D)revenue
• E)budgetary

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Definitions:

Expected Value

A statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen.

Perfect Information

A condition in decision-making scenarios where all actors have access to all relevant information to make a decision.

EVPI

Expected Value of Perfect Information (EVPI) represents the maximum amount an organization would be willing to pay for perfect information about the future, helping in making an optimal decision under uncertainty.

EMV

Expected Monetary Value, a statistical concept used in decision making to calculate the average outcome when the future includes scenarios that may or may not happen.