Quiz 13: Short-Run Decision-Making: Relevant Costing

Business

Difference between strategic and tactical decisions Strategy : A basic difference is that strategy implies a long range view or outlook in the planning cycle. Tactic, by contrast with that support or facilitate achieving the long range strategic objectives. On these bases, we can differentiate between these two types of decisions: img

(E) All of these are steps in the short-run decision making model. It includes following six steps: • Recognize and define the problem. • Identify feasible alternatives. • Identify costs and benefits with each feasible alternative. • Estimate the relevant costs and benefits for each feasible alternative. • Assess qualitative factors. • Make the decision by selecting the alternatives with the greatest overall net benefit.

The following things should be considered while determining feasible set of alternative: • Costs and benefits of each alternative. • Time period of each alternative. • Complementary effects of each alternative on business. • Past experiences, success rate and industry trades for each alternative. • Assess qualitative factors like • Political pressure • Quality of the product • Reliability of supply • Product safety etc.