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WalesBusinessQuick questions
Business Analysis and Strategy (A2 Unit 3)
Quick questions on Decision-making models - WJEC A-Level Business
4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is critical path analysis (CPA)?Show answer
Float (slack) is the spare time on non-critical activities (LFT - duration - EST). CPA helps a firm finish a project in the shortest time, allocate resources efficiently and identify which activities must not slip. Its limits are that activity times are estimates and it cannot account for unexpected problems.
What is cost-benefit analysis?Show answer
Cost-benefit analysis (CBA) weighs all the costs of a decision against all its benefits, including not just private financial costs and benefits but external (social) ones such as pollution, congestion or community gains. If the benefits outweigh the costs, the decision is worthwhile. CBA is widely used for large projects with wider social effects (a new road, a factory). Its weakness is that putting a money value on social and environmental effects is difficult and subjective.
What is q1?Show answer
Define the term expected value. [2 marks]
What is q2?Show answer
A decision has a 50% chance of a £80,000 gain and a 50% chance of a £20,000 gain. Calculate the expected value. [2 marks]
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