Welcome to the lesson. By the end of this lesson, you should be able to identify common operational decisions, define the concept of relevant information, and use this relevant information. Now let's broadly distinguish between different types of decisions. One, we have operational, two, sales oriented, and three, strategic. I would differentiate this third category, strategic, in terms of time horizon and focus. Strategic decisions usually are more long term, and consider the long term strategy of the firm over five or perhaps ten years into the future. Operational and sales oriented decisions are a little bit more short term. They can certainly extend along longer time periods, but they're primarily focused with today and in your future. Now in terms of operational decisions, that will be our focus for this first part of the lesson. I think about things in four different categories. Operational decisions can be make or buy. Adding a product line, eliminating a product line, or replacing old equipment with new equipment. These are four main types. And of course there are others, but these are the ones that we'll focus on. Now in terms of make or buy decisions, that's basically whether the firm outsources or insources different activities that are used to create value. Basically the firm can make an input itself, or it can buy it from an outside supplier. We can also think about this in the service, can produce the service itself, or it can assign it to a third-party. Another type of decision would be expansion, growth, retraction, or just general changes in the types of products that the firm offers. So in terms of growth, managers might wonder whether or not they need to add a product line. In terms of retraction or a change in direction, a firm might decide to eliminate a product line. Sometimes both of these decisions are made simultaneously, basically replacing the old with the new. And speaking of that, you could think about that decision in relation to the infrastructure as well. Especially manufacturing facilities have a series of machinery and equipment that they relied on for the production process. And managers often have to decide when to replace the old equipment with new or just continue renting, maintaining, and repairing that old infrastructure. As you can see, we have a lot of different operational decisions that we can approach. We'll focus on make or buy, and then of course, messing around with product lines. Let's have a checkpoint before we get into the specific examples. So, one more point before we enter into the examples, and that involves the different perspectives that you could adopt when approaching these decisions. Of course, you can adopt a financial perspective. We'll focus on revenues, costs, profits, and how those change, depending on the path the manager decides to take. Well, of course, there are other perspectives to adopt as well. In particular, a non-financial perspective, but often times the implications via non-financial perspective are difficult to quantify. And therefore, it is difficult to combine with that financial perspective. This is especially the case when we start talking about strategic considerations that the decision has at it's heart. While we won't be able to combine both these perspectives in every case, we'll always have both in mind as we look at how operational decisions are made.