(c) Briefly discuss why the directors of HFL might choose contract D irrespective of wheth

Question

(c) Briefly discuss why the directors of HFL might choose contract D irrespective of whether or not contract D

would have been selected using expected values as per part (a). (2 marks)

Answer 1

正确答案：
(c) The directors might select Contract D under which 360,000 kilograms of organic mushrooms would be supplied to HFL for
each outlet. This is the entire capacity of HFL which would ensure that competitors would not be able to supply the same
product and hence the competitive advantage held by HFL might be preserved.