Consistent with the concept of bounded rationality, operations managers may face varied challenges when making decisions under complex environments characterised by certainty, risk or uncertainty. Consider each of the following statements, some of which are incorrect, and answer the question which follow. i A managerial decision-making under conditions of uncertainty is primarily characterised by states of nature and payoff functions which are broadly probabilistic; whilst decisions under risk have broad uncertainties to them. ii With the advent of the Fourth Industrial Revolution (4IR), the fusion of advances in artificial intelligence (AI), robotics, machine learning, Internet of Things (IoT) and big data is expected to create an enabling environment to address issues of uncertainty. iii A decision tree may be used as a tool of appraisal for decisions under risk. iv In contexts characterised by a dearth of information on risk distribution, decision-making is broadly certain. However, where some measure of the risk distribution is known, decision-making is deterministic. V Managerial decision-making under risk are characterised by situations where the outcomes are unknown, but probabilities are know Whilst decisions under uncertainty involve cases where outcomes are unknown and probabilities are unknown. REQUIRED: Which TWO of the statements above are incorrect? A. ii and iii B. i and iv C. iii and v D. i and iii
Consistent with the concept of bounded rationality, operations managers may face varied challenges when making decisions under complex environments characterised by certainty, risk or uncertainty. Consider each of the following statements, some of which are incorrect, and answer the question which follow. i A managerial decision-making under conditions of uncertainty is primarily characterised by states of nature and payoff functions which are broadly probabilistic; whilst decisions under risk have broad uncertainties to them. ii With the advent of the Fourth Industrial Revolution (4IR), the fusion of advances in artificial intelligence (AI), robotics, machine learning, Internet of Things (IoT) and big data is expected to create an enabling environment to address issues of uncertainty. iii A decision tree may be used as a tool of appraisal for decisions under risk. iv In contexts characterised by a dearth of information on risk distribution, decision-making is broadly certain. However, where some measure of the risk distribution is known, decision-making is deterministic. V Managerial decision-making under risk are characterised by situations where the outcomes are unknown, but probabilities are know Whilst decisions under uncertainty involve cases where outcomes are unknown and probabilities are unknown. REQUIRED: Which TWO of the statements above are incorrect? A. ii and iii B. i and iv C. iii and v D. i and iii
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:Consistent with the concept of bounded rationality, operations managers may face varied challenges when
making decisions under complex environments characterised by certainty, risk or uncertainty.
Consider each of the following statements, some of which are incorrect, and answer the question which follow.
i A managerial decision-making under conditions of uncertainty is primarily characterised by states of nature
and payoff functions which are broadly probabilistic; whilst decisions under risk have broad uncertainties to
them.
ii With the advent of the Fourth Industrial Revolution (4IR), the fusion of advances in artificial intelligence (AI),
robotics, machine learning, Internet of Things (IoT) and big data is expected to create an enabling environment
to address issues of uncertainty.
iii A decision tree may be used as a tool of appraisal for decisions under risk.
iv In contexts characterised by a dearth of information on risk distribution, decision-making is broadly certain.
However, where some measure of the risk distribution is known, decision-making is deterministic.
V
Managerial decision-making under risk are characterised by situations where the outcomes are unknown,
but probabilities are known. Whilst decisions under uncertainty involve cases where outcomes are unknown and
probabilities are unknown.
REQUIRED:
Which TWO of the statements above are incorrect?
A. ii and iii
B. i and iv
OC. iii and v
D. i and iii
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