After watching customer patterns for the first few weeks in his new business, Ah

Question

After watching customer patterns for the first few weeks in his new business, Ahmad knows that most of his customers arrive in the early morning (before 9.30 AM) or in the late afternoon (between 3.30 PM and 5.00 PM). Based on this information, he has decided to close his fabric shop at 5.30 PM.


(a) Is Ahmad making his decision under conditions of certainty, uncertainty or risk? Explain in two sentences.


(b) Is his information most likely based on information or experience? Explain in two sentences.

Explanation / Answer

(a). Ahmad is making his decision under conditions of certainty because he know when the customers will come (b). His information most likely based on experience because he observed that the most of the customers will come before 9:30 AM or in the late afternoon (between 3.30 PM and 5.00 PM)

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