Question

What are trade-offs? Why is careful consideration of trade-offs important in decision making?

Answer 1

Answer:

A careful consideration of trade-offs should be made in decision making because failure to that,an individual may end up making a switch of options that is not optimal and should therefore consider the benefits and costs associated between the options in question.

Answer 2

The trade off and why it's careful consideration is important in decision making is explained below:

Explanation:

• A trade-off (or tradeoff) is any situational decision that involves consequences i.e. advantages and disadvantages of taking that action.
• It involves weighing of pros and cons regarding a particular decision.
• For example, if a manager decides to increase the inventory level, he or she has to consider the trade-off between increased level of customer service and the additional inventory carrying cost.
• A careful consideration of trade-offs is important in decision making because it can help make the decisions that will optimize the output, maximize profit and reduce costs.
• Failure in making such considerations may lead to opting for options that are not in the best interest with regards to benefits and opportunity cost associated with the options available to choose from.