1. Lower Reaches Ltd are opening coffee shops within supermarkets. There is some uncertainty as how much fresh food customers will want, the expectation is that demand will be either 7,500, 8,000 or 10,000 units per week. Fresh food will need to be disposed of if it remains unsold, and the plan is to donate this to charities. Contribution per unit is 2.

Required:

The company need to decide on the quantity to buy and sell. Explain the different decision criteria including how these could be used to make a decision. Include a numerical example (you will need to use your own figures, ensuring the example is consistent with the information given). Include comment on the usefulness of these criteria and any other factors that might influence the decision. Max. words 500