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Chapter 7

Risk and Uncertainty

Outcome

By the end of this session you should be able to:

 describe generally available research techniques to reduce uncertainty, e.g.
focus groups, market research

 suggest for a given situation, suitable research techniques for reducing
uncertainty

 explain, using a simple example, the use of simulation

 explain, calculate and demonstrate the use of expected values and sensitivity
analysis in simple decision-making situations

 for given data, apply the techniques of maximax, maximin and minimax regret to
decision making problems including the production of profit tables

 calculate the value of perfect information

 calculate the value of imperfect information

and answer questions relating to these areas.

The underpinning detail for this Chapter in your Integrated Workbook can
be found in Chapter 7 of your Study Text

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