Premium Essay

Egc1

In: Business and Management

Submitted By aromaverde
Words 521
Pages 3
1. Marginal utility: is the extra satisfaction from the consumption of 1 more unit of some good or service. 2. To maximize satisfaction, the consumer should allocate his or her money income so that the last dollar spent on each product yields the same amount of extra (marginal) utility. We call this the utility-maximizing rule. When the consumer has “balanced his margins” using this rule, he has achieved consumer equilibrium and has no incentive to alter his expenditure pattern. 3. Linear programming (LP, or linear optimization) is a mathematical method for determining a way to achieve the best outcome (such as maximum profit or lowest cost) in a given mathematical model for some list of requirements represented as linear relationships. Linear programming is a specific case of mathematical programming (mathematical optimization). 4. Utility is a measure of the total worth of a particular outcome; it reflects the decision maker's attitude toward a collection of factors such as profit, loss, and risk. Researchers have found that as long as the monetary value of payoffs stays within a range that the decision maker considers reasonable, selecting the decision alternative with the best expected monetary value usually leads to selection of the most preferred decision. However, when the payoffs become extreme, most decision makers are not satisfied with the decision that simply provides the best expected monetary value. 5. The Delphi method (/ˈdɛlfaɪ/ DEL-fy) is a structured communication technique, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. Delphi is based on the principle that forecasts (or decisions) from a structured group of individuals are more accurate than those from unstructured groups.[6] The technique can also be adapted for use in face-to-face meetings, and is then called mini-Delphi...

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