II Decision-making techniques- 10
Relevant cost analysis- Concept, Identification and calculation of relevant costs, concept of opportunity costs.
Cost volume analysis-Meaning, nature, limitations, Breakeven point, Margin of safety, Multiproduct situation, Breakeven chart and profit volume charts.
Limiting factors-Meaning, multiple scarce resource problem (both graphically and using simultaneous equations as appropriate), calculation of shadow prices (dual prices) and slack- implications on decision-making and performance management.
Pricing decisions-factor influencing the pricing of a product or service, price elasticity of demand, decision based on incremental costs, incremental revenues and other factors, optimum selling price and quantity for an organization, demand based approach to pricing (both tabular and algebraic methods, pricing strategies, including: i) All forms of cost-plus, ii) Skimming, iii) Penetration, iv) Complementary product,
v) Product-line, vi) Volume discounting, vii) Discrimination, viii) Relevant cost, Calculation of a price from a given strategy using cost-plus and relevant cost.
Make-or-buy and other short-term decisions-
Dealing with risk and uncertainty in decision making-research techniques to reduce uncertainty e.g. Focus groups, market research, use of simulation, expected values and sensitivity, techniques of maximax, maximin,and minimax regret in decision-making , decision tree, value of perfect and imperfect information.