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Accounting Decision Support Tools

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Added on  2021-04-16

Accounting Decision Support Tools

   Added on 2021-04-16

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Accounting Decision SupportToolsAssignment - IIIStudent Name[Pick the date]
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Question 1 (a)The decision making process comprises of a host of defined steps as illustrated as follows.Objective definition of the expectations from the decision carried out by decisionmaker. Futher, the possible outcomes that are likely from the the decision also got tobe listed. Adeqaute brainstoriming must be perfomed so as to identify the various alternativesthat the decision makers can potentially choose. Taking into consideration the states of nature along with the chances of occurrence ofthese states, the alternative analysis needs to be carried out. The payoff expeted from each alternative under the different states of nature must beclearly defined in monetary terms.Finally the decision maker should take the decision based on the payoff matrixderived along with decision making model.(b)In decision analysis framework, alternatives refer to the different strategies or course ofaction that the decision maker can possibly pursue. The challenge for the decision maker isto determine the optimum alternative considering the states of nature which are futuresituations that can arise and are out of control of decision maker. For example states of naturemay be in the form of economic outlook being optimistic, neutral and pessimistic. Based onthe underlying likelihood of the states of nature, suitable needs to be decided. (c) (1) The conditional profits matrix for the possible opetions for purchase is shown below:1
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(2) Case: Let the fish vendor is an optimist The best suitable option for an optimist would be 30kg sea food. (3) Case: Let the fish vendor is an pessimisticThe best suitable option for a pessimistic would be 10kg sea food. (4) Case: Let the fish vendor is applying Laplace rule The best suitable option through Laplace rule would be 25kg sea food. 2
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(5) Case: Let the fish vendor is applying regret matrix The best suitable option through regret matrix would be 25kg sea food. (6) Case: Let the fish vendor is agreed to use the method to maximize the expected monetaryvalue The best suitable option through regret matrix would be 25kg sea food. (7) Weekly demand foe fillets = Normal distribution Mean = 20 kg Standard deviation = 5 kg 3
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