Question
Lichfield Cakes Limited is considering launching a new range of cakes, however they only have capacity for one new range. They know that the economic
Lichfield Cakes Limited is considering launching a new range of cakes, however they only have capacity for one new range. They know that the economic environment is uncertain and some of the cakes are expensive, luxury products. They have commissioned some market research and the table below details the predicted monthly profits for each possible economic condition Market conditions Potential new range Almond cakes Cupcake Boxes French Opera Cakes Wedding Cakes Weak 40,000 35,000 14,000 6,000 Reasonable 45,000 48,000 39,000 34,000 Good 55,000 62,000 81,000 95,000 If the company applies the minimax regret rule it will invest in: a) Almond cakes b) Cupcake boxes c) French Opera cakes d) Wedding cakes
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