Question

Managers in an organization often use spreadsheets to assist with decision making. The process of using a spreadsheet to try out alternatives is called______.

A) what-if analysis
B) data mining
C) flowcharting
D) querying
E) data manipulation

Answer 1

The term for using a spreadsheet to experiment with different scenarios in decision making is known as what-if analysis, and it's often used in conjunction with tools like cost/benefit analysis. Hence, option (A) is correct.

Step-by-step explanation:

The process of using a spreadsheet to try out alternatives in decision making is called what-if analysis. This method allows managers to test different scenarios by changing values in the spreadsheet and observing the outcomes on various parameters, assisting in informed decision-making. Another decision-making tool is the cost/benefit analysis, which includes creating a T-shaped chart and comparing the costs against the benefits.

Here, costs refer to what is given up, such as money, effort, and other resources, while benefits represent what is gained from a decision, including money, time, experience, and other improvements. When considering additional units, weighing marginal costs and marginal benefits can also be vital in decision making.