Business Management Toolkit
Business Management Toolkit
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Business Management Toolkit
Available time 20 Minute(s)
01

Earthly

Business Management Toolkit
:
Available time 20 Minute(s)
01. Question
Level Easy
Maximum Mark 10
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Earthly, a partnership between dieticians, produces healthy foods option for kids. Capacity utilization is very high.

The partners are considering some strategic changes. After conducting research, they presented three options and outlined the costs and expected revenue. They also predicted that the economy would either improve or stay the same. The probability of the economy staying the same is 0.3.

The options, costs and expected revenue are given below:

Table 1: Information relating to the three strategic options for change

(a). Describe one disadvantage for an organization of operating at high capacity utilization.

[Marks: 2]

(b). Construct a fully labelled decision tree and identify the best option for Earthly (show all your working).

[Marks: 6]

(c). Explain one limitation for Earthly of using a decision tree as a planning tool.

[Marks: 2]
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