Why Are Decision Trees Useful to Managers Who Plan Business

question 65

Multiple Choice

Why are decision trees useful to managers who plan business strategies?

• A)Decision trees explain the level of concentration in an industry.
• B)Decision trees can be used to increase the amount of product differentiation; this enables managers to charge higher prices for their products.
• C)Decision trees provide a systematic way of thinking through the implications of a strategy.
• D)Using a decision tree always leads to a dominant strategy.

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Definitions:

Joint Costs

The costs incurred in a joint manufacturing process.

Split-Off Point

The point in a joint manufacturing process where the joint products become separable.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate product costing.

Production Activity Costs

The expenses directly associated with the manufacturing process, including labor, materials, and overhead.