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Question 2

From Business Management SL Paper 2 (November 2024, TZ2)

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  1. Fritos Food (FF)

Fritos Food (FF) is a restaurant started by Friya Shah that offers a range of fast food. FF’s customers have high brand loyalty, and demand is increasing. Friya is considering expansion, and she has identified three options, which are shown in Table 1.

Table 1: Estimated financial data relating to the three expansion options

Table showing estimated financial data for three expansion options for Fritos Food (FF), including cost, probability of high/low returns, and expected revenue.
Table showing estimated financial data for three expansion options for Fritos Food (FF), including cost, probability of high/low returns, and expected revenue.

(a) State two advantages for a business of having customers with high brand loyalty. [2]

(b) Using Table 1, construct a fully labelled decision tree and identify the best option for FF (show all your working). [6]

(c) Explain one advantage for Friya of using a decision tree. [2]