Asked by Cesar Nieto on Sep 24, 2024
Verified
While working under uncertain conditions,it is better to
A) Maximize total profits
B) Minimize error costs
C) Maximize error costs
D) Minimize profits
Error Costs
The expenses associated with making incorrect decisions or judgments, including costs of correction and opportunity costs.
Uncertain Conditions
Situations where outcomes or future events are unknown or unpredictable.
- Acquire knowledge on the decision-making process in uncertain situations and how to weigh the risks against the benefits.
Verified Answer
SM
Selloane Marorisang4 days ago
Final Answer :
B
Explanation :
When working under uncertain conditions, there is always a risk of making errors. Minimizing error costs becomes crucial in such situations to avoid any losses. Maximizing total profits or minimizing profits may not be feasible options, as uncertainty can impact the commercial outcomes. Thus, minimizing error costs is the best choice.
Learning Objectives
- Acquire knowledge on the decision-making process in uncertain situations and how to weigh the risks against the benefits.