value and cost of information

There may be certain situations where management is sufficiently clear that no additional information is likely to change its decision. In such cases, it should be obvious that the value of information is negligible. In contrast, there may be certain situations where the decisions cry out for information which is not available at any price. Between these two extremes, there are a large number of situations where the availability of additional information will improve the odds of making a good decision. Unless the information collected does not lead the manager to change or modify his decision, the information has no value. In other words, if a manger has already made up his mind that regardless of what is revealed by the information, he will adhere to a particular line of action, there is no point in collecting information. Generally, information is most useful in cases: 1) where one is unsure of what is to be done. 2) Where extreme values, say, huge profits or losses, are involved. By collecting information, the management is simply reducing the odds of making a wrong decision. However it is not that any type of information available can serve the purpose. In order that information is really useful to the researcher. It must be Relevant This is the most important characteristic. It means that the information is relevance to the subject or enquiry. Availability When a decision is being made be available. Accurate The information, which is going to be used for decision making, must be accurate. Obviously, the use of wrong information will lead to wrong decision. Current Information must be current. This implies that it is not an obsolete one and is applicable to the times period of the study. Adequate Information should be adequate. Scanty or piece meal information will not serve the purpose. It may be mentioned that the available information may not have all the characteristics. As such, tradeoffs are usually made among these chracterstics, depending on their relative importance to the research problem. However, as the most important characteristic is relevance, it must not be compromised in such a tradeoff.