Accounting Decision Support Tools Assignment

Added on - 31 May 2021

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Accounting DecisionSupport ToolsAssignment –IIIStudent Name[Pick the date]
Question 1(a)Steps that need to be undertaken as part of decision making are briefly highlighted below.The decision maker needs to objectively outline the decision expectations along withthe outcomes that are possible for the given decision.The decision maker would be presented with various possible alternatives that need tobe identified.The indiviual analysis of the alternative needs to be undetaken considering thepotential outcomes and their respective likelihood.For the host of outcoems that have been identified , a payoff matrix needs to becreated keeping the risk into consideration.Considering the payooff matrix derived in the above step, the decision maker shouldapply the selected decision making model for making the final decision.(b)Alternatives are the varying strategies that are available for deployment by the decisionmaker in wake of the underlying decision. However, these alternatives are linked to the statesof nature which are potential future events which cannot be controlled by the decision maker.For different states of nature, the alternative would vary but the challenge for the decisionmaker is to pick an alternative which is suitable considering the likely future states.(c) The sales and number of items purchased are shown below:(1) Conditional profits matrix1
(2) Optimist (Maxi-max)Optimum purchase would be 30kg as per maxi-max rule.(3) Pessimistic (Maxi-min)Optimum purchase would be 10kg as per maxi-min rule.(4) Laplace criterionOptimum purchase would be 25kg as per laplace criterion.(5) Criterion of regret2
Optimum purchase would be 25kg as per criterion of regret.(6) Expected monetary valueOptimum purchase would be 25kg as per criterion of regret.(7) Optimum quantity of sea food to derive maximum profit.Critical factor = 15 / (15+5) = 0.750Hence, the z value would be determined with the help of critical factor.z=NORMSINV(0.750)z=0.675Optimum quantity3
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