SECTION B:| QUESTION FOUR Caroline Jones is the owner of The Hungry Spud Caf. She has recently been approached to operate a food stand, for one day, at UCC Fresher's Week celebrations. Caroline is uncertain as to the possible demand for her product, estimating it will be either 300 baked potatoes (spuds): 500 spuds'; 700 spuds'; or 1,000 spuds'. Caroline will be required to open the stand early in the morning and so will need to prepare all of the 'spuds' in advance. food charity. Caroline has prepared the following financial projections in relation to The Sales price per 'spud' (unit) Direct labour cost per unit Variable production overhead per unit Permit to trade on UCC campus (fixed) 5.00 1.50 0.50 0.40 200 Required: (A) Distinguish between maximin, maximax and least regret criteria (approach) for decision making. Determine how many 'spuds' should be produced according to each approach and provide a rationale for your answers, including a short description of how a decision-maker might apply each of these criteria. (35 marks) RT DESIGN PGE LAVOUT REFERENCES MAILINGS REVIEW VIEW how a decision maker might apply each of these criteria (35 marks) (B) The Caf also produces speciality cakes, for which the following data is available. Beta Unit Selling Price Unit Raw Material A Cost Contribution Margin Alpha 100 12.00 30% Delta 52.50 5.25 20% 13.50 25% Demand for each of the products is strong. However, in some months there are not enough product (cake) and it costs 1.50 per kilogram. Required: Advise Caroline as to the order in which production of each product (cake) should proceed, if the profit of the company is to be maximised. Additional stocks of materials may become available at a premium over the usual price. If there is unfilled market demand for all three products, what is the highest price that Caroline should be willing to pay for any additional kilograms of materials? Explain the rationale for your answer. (15 marks) (Total: 50 marks) SECTION B:| QUESTION FOUR Caroline Jones is the owner of The Hungry Spud Caf. She has recently been approached to operate a food stand, for one day, at UCC Fresher's Week celebrations. Caroline is uncertain as to the possible demand for her product, estimating it will be either 300 baked potatoes (spuds): 500 spuds'; 700 spuds'; or 1,000 spuds'. Caroline will be required to open the stand early in the morning and so will need to prepare all of the 'spuds' in advance. food charity. Caroline has prepared the following financial projections in relation to The Sales price per 'spud' (unit) Direct labour cost per unit Variable production overhead per unit Permit to trade on UCC campus (fixed) 5.00 1.50 0.50 0.40 200 Required: (A) Distinguish between maximin, maximax and least regret criteria (approach) for decision making. Determine how many 'spuds' should be produced according to each approach and provide a rationale for your answers, including a short description of how a decision-maker might apply each of these criteria. (35 marks) RT DESIGN PGE LAVOUT REFERENCES MAILINGS REVIEW VIEW how a decision maker might apply each of these criteria (35 marks) (B) The Caf also produces speciality cakes, for which the following data is available. Beta Unit Selling Price Unit Raw Material A Cost Contribution Margin Alpha 100 12.00 30% Delta 52.50 5.25 20% 13.50 25% Demand for each of the products is strong. However, in some months there are not enough product (cake) and it costs 1.50 per kilogram. Required: Advise Caroline as to the order in which production of each product (cake) should proceed, if the profit of the company is to be maximised. Additional stocks of materials may become available at a premium over the usual price. If there is unfilled market demand for all three products, what is the highest price that Caroline should be willing to pay for any additional kilograms of materials? Explain the rationale for your answer. (15 marks) (Total: 50 marks)