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What are some economic tools that can help managerial decision making?

A:

Quick Answer

The economic tools of managerial decision making are optimization, game theory, numerical analysis, statistical estimation and forecasting. Optimization is particularly important for managerial decision making.

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Full Answer

Mathematical analysis is used for maximizing a company's objective in spite of certain constraints like capacity and cost during optimization. To find out the standard deviation of a product's price or its average or mean value, a simple form of statistical estimation can be used.

Forecasting becomes important when it comes to matters like output and sales. A regression equation can be used for producing a future forecast based on the previous cause and effect relationships among variables, such as customer confidence level.

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