Assignment – 03

Name of Participants: Class: Registration IDs:

Sareena Gulzar BBA-VI bba192044

Malaika Farooqui BBA-VI bba192036

Uphaz Stephen BBA-VI bba192038

Farrukh Fayyaz BBA-VI bba192037

Muhammad Usman Ansari BBA-VI bba191009

Course: Entrepreneurship & Small Business Management

Date: 28th November 2022

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Answer 1. Three business situations discussed in chapter 3 are:
1. Prediction
2. Risk
3. Uncertainty

PREDICTION: Prediction is the ability to determine possible future outcomes based on the
patterns of past events and already available information. In simpler terms, prediction is the
process of looking into the future and taking preventive measures to be prepared for it.
Therefore, in the current market, we have a variety of forecasting and prediction tools that are
being widely used by many business forecasters where they analyze and plan the situation
based on their intelligence, available information, and trends of the past for example sales and
demand forecasting. No doubt prediction is important to make informed business decisions
but still, there are many risks involved in relying on prediction because it involves various
assumptions and approximations.

RISK: In any situation where the possible outcome cannot be predicted and is unknown,
which can result in either loss or a gain is known as a risk. In risky situations we cannot
completely rely on the information from past occurrences instead we have to adapt to the
changes in past scenarios. we cannot make decisions based on the available information only
but we need to learn and change our tactics and approach along the way as we gain new
information about the situation at hand which means that risk can be handled through
proactive measures and not through preventive measures. Since not all market factors are
known and it is nearly impossible to always have complete knowledge of every circumstance
or accurately predict future outcomes, it is important to have the capacity to accept the risk
because, once you enter the market, there is a high possibility that things will not act in the
way you had anticipated. Consequently, the risk is now prevalent in today's economic
environment.

UNCERTAINTY: Known as the ‘blank map’. It refers to a situation where no past/historical

data is present or available to aid the decision-maker. Due to its name, it cannot be modeled
or predicted (unknowable) by anyone or anything. Uncertainty primarily exists within a new
product or new technology or new market whenever it is launched at both levels (micro &
macro) in the world. For example, a time when the idea of men flying like birds in the sky
seemed impossible or unknowable (uncertain) changed with the birth or creation of airplanes
which a person can use to fly and cover vast distances in mere moments as opposed to
traveling on land.

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Answer 2.
KEY CONCEPTS OF CHAPTER 3

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