| accurate information | Precise and correct data.
|
 |
|
|
| avoidable expenses | Expenses that will no longer be incurred if a particular action is taken.
|
|
|
|
| constraints | Algebraic expressions of limitations faced by a firm, such as those limiting its productive resources.
|
|
|
|
| decision variables | The variables in a linear program about which a decision is made.
|
|
|
|
| differential cost | The difference in a cost item under two decision alternatives.
|
|
|
|
| expected value | The sum of the possible values for a random variable, each weighted by its probability.
|
|
|
|
| feasible region | The possible values for decision variables that are not ruled out by constraints.
|
|
|
|
| information overload | The provision of so much information that, due to human limitations in processing information, managers cannot effectively use it.
|
|
|
|
| joint cost | The cost incurred in a joint production process before the joint products become identifiable as separate products.
|
|
|
|
| joint production process | A production process that results in two or more joint products.
|
|
|
|
| make-or-buy (or outsourcing) decision | A decision as to whether a product or service should be produced in-house or purchased from an outside supplier.
|
|
|
|
| objective function | An algebraic expression of the firm's goal.
|
|
|
|
| opportunity cost | The potential benefit given up when the choice of one action precludes selection of a different action.
|
|
|
|
| outsourcing (or make-or-buy) decision | A decision as to whether a product or service should be produced in-house or purchased from an outside supplier.
|
|
|
|
| qualitative characteristics | Factors in a decision analysis that cannot be expressed easily in numerical terms.
|
|
|
|
| relative-sales-value method | A method in which joint costs are allocated to the joint products in proportion to their total sales values at the split-off point.
|
|
|
|
| relevant information | Data that are pertinent to a decision.
|
|
|
|
| sensitivity analysis | A technique for determining what would happen in a decision analysis if a key prediction or assumption proves to be wrong.
|
|
|
|
| separable processing cost | Cost incurred on a joint product after the split-off point of a joint production process.
|
|
|
|
| split-off point | The point in a joint production process at which the joint products become identifiable as separate products.
|
|
|
|
| sunk costs | Costs that were incurred in the past and cannot be altered by any current or future decision.
|
|
|
|
| timely information | Data that are available in time for use in a decision analysis.
|
|
|
|
| unavoidable expenses | Expenses that will continue to be incurred even if a subunit or activity is eliminated.
|