DECISION MAKING UNDER CERTAINTY

Certainty means a decision can be taken with full knowledge about the
situation. It means to have complete information about future conditions.
Under conditions of certainty, the manager has enough information to know
the outcome of the decision before it is made.
A condition of certainty exists when the decision-maker knows with
reasonable certainty what the alternatives are, what conditions are
associated with each alternative, and the outcome of each alternative.
Under conditions of certainty, accurate, measurable, and reliable
information on which to base decisions is available

Examples of decision making under certainty

For example; a farmer wants to decide which crop should plant among
three crops, on his 100-acre farm.

The payoff from each is dependent on the rainfall during the growing
seasons. The farmer has categorized the amount of rainfall. It was high
rainfall, medium rainfall and low rainfall. his estimated profit for each is
given in the table below.

Considering the above information, the farmer decided which crop should be planted under the amount
of rainfall as high, medium and low.