Graphical method, Managerial Accounting

Assignment Help:

GRAPHICAL METHOD

Graphical methods can be used in games with no saddle points and having pay off m X 2 or 2 X n matrix.
The aim is to substitute a much simpler 2 X 2 matrix for the original m X 2 or 2 X m matrix.

Example:
Establish the optimum strategies and the value of the game from the following payoff matrix game.

24_formula1.jpg

Draw two vertical axes and plot two payoffs corresponding to each of the five columns. The pay off numbers in the first row is plotted on Axis I and those in second rows on Axis II.

1050_formula2.jpg



Thus the two pay off numbers 6 and 3 in the first column are shown respectively by point A on Axis I and point B on Axis II.
Join the corresponding pay off numbers on Axis I and Axis II by straight lines.

On the two intersecting lines at the very bottom, thicken them from below up to the point of intersection, i.e. utmost point on the boundary.
The thick lines on the graph KT and LT meet at T

The two lines passing through T, identify the two critical moves of Y which combined with X, yield the following 2 X 2 matrix.

743_Formula3.jpg


Related Discussions:- Graphical method

Research, Activity Based costing and Functional Based Costing compare them ...

Activity Based costing and Functional Based Costing compare them together in terms of efficiency, advantages, disadvantages and accuracy.

Explain direct labor cost standard, Explain Direct labor cost standard ...

Explain Direct labor cost standard The setting up of standard labor cost for each product would require: a) The determination of budgeted fixed overhead for a period b) B

Determine the functions of management accounting, Determine the Functions o...

Determine the Functions of management accounting: 1. Planning and forecasting: management fixes various targets to be achieved by the business in near future. Planning and fo

Make and b, The Rohr Company’s old equipment for making subassemblies is wo...

The Rohr Company’s old equipment for making subassemblies is worn out. The company is considering two courses of action: (a) Completely replacing the old equipment with new equipme

Compute the operating cycle, Under this method, approximation is made of pa...

Under this method, approximation is made of payments and cash receipts in the ensuring period. The dissimilarity of these payments and receipts indicates deficiency or surplus of c

Revolving credit, The revolving credit facility will be specified by the ba...

The revolving credit facility will be specified by the banker to the customer through providing specific amount of credit facility for a continuous basis. The borrower will not be

Cross elasticity of demand, what is cross elasticity of demand? is it posit...

what is cross elasticity of demand? is it positive for substitute or compliments? show in a diagram relating to the demand for the coffee to the price of tea

Innovations of management accounting and control, Implementing management a...

Implementing management accounting and control innovations are often problematic. Provide a brief commentary around the key factors necessary to give such innovations the best chan

Minimal regret criterion-laplace criterion of rationality, Minimal Regret C...

Minimal Regret Criterion : This method seeks to minimize the maximum regret that would occur from choosing a particular strategy or alternative.  The regret is the opportunit

Ageing schedule, Ageing Schedule: AS is classifies outstanding accounts r...

Ageing Schedule: AS is classifies outstanding accounts receivable at a specified point of time into various age brackets. A clarifying ageing schedule is specified below.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd