Consistently Using a Structured, Model Based Process to Make Decisions

question 69

Multiple Choice

Consistently using a structured, model based process to make decisions

• A) should produce good outcomes more frequently.
• B) is less effective than making decisions in a haphazard manner.
• C) is evidence that luck plays an important role in decision making.
• D) always leads to well-deserved success in managerial decision making.

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Definitions:

Required Sales

The volume of sales necessary to achieve a specific financial objective, such as covering costs or reaching a target profit.

Contribution Margin

It is the amount by which sales revenue exceeds variable costs. It contributes towards covering fixed costs and generating profit.

Variable Expenses

Costs that vary in direct proportion to changes in an activity level or volume, such as sales commissions.

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume, such as rent.