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Business A2 > Decision-making Techniques > Flashcards

Decision-making Techniques Flashcards

1
Q

What is centering

A

a method used to calculate a moving average, where the average is plotted or calculated in relation to the central figure

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2
Q

What is correlation

A

the relationship between two sets of variables

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3
Q

What is correlation coefficient

A

a measure of the extent of the relationship between two sets of variables

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4
Q

What is extrapolation

A

forecasting future trends based on past data

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5
Q

What is the line of best fit

A

A straight line drawn through the center of a group of data points plotted on a scatter graph

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6
Q

What is moving average

A

a succession of averages derived from successive segments of a series of values

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7
Q

What is a scatter graph

A

a graph showing the performance of one variable against another independent variable on a variety of occasions, it is used to show whether a correlation exists between the variables

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8
Q

time-series analysis

A

a method that allows a business to predict future levels from past figures

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9
Q

What is the average rate of return or accounting rate of return (APR)

A

A method of investment appraisal that measures the net return per annum as a percentage of the initial spending

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10
Q

What is capital cost

A

The amount of money spent when setting up a new venture

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11
Q

What is cash inflow

A

the cash coming into the business such as that from sales or bank loans

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12
Q

What is cash outflow

A

The cash going out of a business when payments are made to workers or suppliers

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13
Q

What is discounted cash flow (DCF)

A

a method of investment appraisal that takes interest rates into account by calculating the present value of future income

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14
Q

What is investment

A

the purchase of capital goods

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15
Q

What is investment appraisel

A

The evaluation of an investment project to determine whether or not it is likely to be worthwhile

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16
Q

What is net cash flow

A

Cash inflow minus outflows

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17
Q

What is net present value (NPV)

A

the present value of future income from an investment project, minus the cost

18
Q

What is opportunity cost

A

When choosing between different alternatives, the benefit lost from the next best alternative

19
Q

What is a payback period

A

The amount of time it takes to recover the cost of an investment project

20
Q

What is qualitative

A

Represented by words

21
Q

What is quantitative

A

represented by numbers

22
Q

What is back data

A

data obtained from a previous time period

23
Q

What is chance node

A

a point on a decision tree diagram where a number of outcomes are possible

24
Q

What is a decision tree

A

a technique which shows all possible outcomes of a decision. The names comes from the similarity of the diagrams to the branches of trees

25
Q

What is expected value

A

the numerical value of an outcome multiplied by the probability of that outcome happening

26
Q

What is probability

A

The chance if an event happening

27
Q

What is rollback technique

A

the process of working back through a decision tree calculating expected values at each node

28
Q

What is critical path

A

the tasks involved in a project which, if delayed, could delay the project

29
Q

What is critical path analysis/network analysis

A

A method of calculating the minimum time required to complete a project, identifying delays which could be critical to its completion

30
Q

What is earliest start time (EST)

A

How soon a task in a project can begin. It is influenced by the length of time taken by tasks which must be completed before it can begin.

31
Q

What is free float

A

The time by which a task can be delayed without affecting the following task

32
Q

What is latest finish time (LFT)

A

The latest time that a task in a project can finish

33
Q

What is a network diagram

A

A chart showing the order of the tasks involved in completing a project, containing information about the times taken to complete the tasks

34
Q

What are nodes

A

positions in a network diagram which indicate the start and finish times of a task

35
Q

What is total float

A

The time by which a task can be delayed without affecting the time needed to complete the project

36
Q

What is contribution

A

The amount of money left over from a sale after variable costs have been substracted from revenue. The money contributes to fixed costs and profit

37
Q

What is contribution costing

A

The use of contribution to help make decisions based on costs, such as which order to accept

38
Q

What is contribution pricing

A

A pricing strategy that involves setting a price that exceeds the value of the variable cost

39
Q

What are overheads

A

An overhead cost or expense, indirect cost

40
Q

What is a total contribution

A

The amount of money left over from the sale of several units, or an order, after variable costs have been covered.

41
Q

What is unit contribution

A

The amount of money left over from the sale of a single unit after variable costs have been covered

Business A2 (10 decks)

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