Managerial Decision Making
About This Chapter
In this chapter, you will encounter a group of techniques designed to provide managers with tools to make decisions among different alternatives, using decision criteria. These techniques are based on the classification of costs in chapter 2. The assumption is that, at least in the short term, costs classified as fixed will stay the same over a period of time irrespective of changes in the level of activity. On the other hand, variable costs will change in direct proportion to fluctuations in levels of activity. In this chapter, we concentrate on fixed and variable cost analysis. In the succeeding chapter, we broaden our scope to examine a range of other decision-making techniques.