• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2026 exams.
Get your discount code >>

UNCERTAINTY IN DECISION MAKING

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › UNCERTAINTY IN DECISION MAKING

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 22, 2019 at 2:35 pm #516871
    Anonymous
    Inactive
    • Topics: 22
    • Replies: 26
    • ☆

    Hello Sir!
    I got a bit confused with the term uncertainty to the context of this question.

    Shifters Haulage (SH) is considering changing some of the vans it uses to transport crates for customers. The new
    vans come in three sizes; small, medium and large. SH is unsure about which type to buy. The capacity is 100
    crates for the small van, 150 for the medium van and 200 for the large van.
    Demand for crates varies and can be either 120 or 190 crates per period, with the probability of the higher demand
    the figure being 0·6.
    SH has in the past been very aggressive in its decision-making, pressing ahead with rapid growth strategies.
    However, its managers have recently grown more cautious as the business has become more competitive.
    Profits table
    Small van Medium van Large van
    Capacity 100 150 200
    Low demand (120 crates) 300 468 368
    High demand (190 crates) 300 500 816

    Which one of the following would reduce the level of uncertainty for SH in their decision-making process?
    A Expected value analysis
    B Market research
    C Sensitivity analysis
    D Relevant Costing

    the correct answer is market research. Market research could be used to obtain data about customer/consumer attitudes. This could help reduce the uncertainty for some elements of decision making.

    why not sensitivity analysis?

    please do help me out with this Sir! Thanks in advance.

    May 22, 2019 at 2:59 pm #516880
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54812
    • ☆☆☆☆☆

    Sensitivity does not reduce the uncertainty. It simply gives a measure of how critical the uncertainty is to the decision. The uncertainty still remains!

    May 22, 2019 at 3:21 pm #516886
    Anonymous
    Inactive
    • Topics: 22
    • Replies: 26
    • ☆

    Thank you for your explanation!

    May 23, 2019 at 8:08 am #516963
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54812
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘UNCERTAINTY IN DECISION MAKING’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • LiliyaM on What is Assurance? – ACCA Audit and Assurance (AA)
  • Sarailee95 on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • John Moffat on PM Chapter 8 Questions Cost Volume Profit Analysis
  • John Moffat on FA Chapter 8 Questions Irrecoverable Debts and Allowances
  • Payal18 on PM Chapter 8 Questions Cost Volume Profit Analysis

Copyright © 2026 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in