After watching customer patterns for the first few weeks in his new business, Ah
ID: 436279 • Letter: A
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
He made his decision under uncertainty but with experience. This is because his business is new, he can not be sure that the times his customers come in to the shop will remain as his business grows and the experience comes from observing the patterns in those early weeks.