Decision-Making Techniques | Edexcel A-Level Business (9BS0)
Decision-Making Techniques
- 118 questions
- 4 subtopics
- Theme 3: business decisions and strategy
- Paper 2 and Paper 3
Decision-making techniques is the third section of Theme 3.
It covers the quantitative tools a business uses to choose between options: forecasting what will sell, judging whether an investment pays back, weighing outcomes against their probability, and scheduling a project so nothing waits unnecessarily.
Sample questions from Decision-Making Techniques
Answer each one closed book first, then open the answer.
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Quantitative sales forecasting
What is a scatter graph?
Show the answer
A graph that plots individual data points to show the relationship between two variables, such as time and sales. -
Quantitative sales forecasting
How does the quality of historical data affect quantitative forecasts?
Show the answer
The accuracy of forecasts depends on the quality and reliability of the historical data used; poor or inaccurate data leads to unreliable predictions. -
Investment appraisal
Calculate the total profit when total cash inflows = £890,000, initial investment = £210,000.
Show the answer
Total profit = 890000 − 210000 = £680,000. -
Investment appraisal
Why is the use of accounting profit rather than cash flows a limitation of ARR?
Show the answer
Accounting profit can be affected by accounting policies, making comparisons less reliable. -
Decision trees
State the formula for expected monetary value (EMV).
Show the answer
EMV = Σ (probability × outcome value). -
Decision trees
Why might the probabilities used in decision trees be unreliable?
Show the answer
Because they may be based on unreliable or subjective data. -
Critical Path Analysis
In which direction do you work through the network to calculate EST?
Show the answer
Forward through the network. -
Critical Path Analysis
Calculate the total float when Latest Finish Time = 33 days, Earliest Start Time = 1 days, Activity duration = 5 days.
Show the answer
Total float = 33 - 1 - 5 = 27 days.
The 4 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Quantitative sales forecasting | Moving averages, scatter graphs and lines of best fit, extrapolation, and the limitations that come from relying on past data. | 24 |
| Investment appraisal | Payback period, average rate of return and net present value, how each is calculated, and what each one ignores. | 39 |
| Decision trees | Nodes and branches, expected monetary value and net gain, and the strengths and limitations of putting probabilities on business outcomes. | 29 |
| Critical Path Analysis | Network diagrams, earliest start and latest finish times, total float, and identifying the path that decides the length of a project. | 26 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel A-Level Business Active Recall Guide
Every topic, not just this one. 2,305 questions with their answers.