Business decision making

Question 1

Tolkien Transport is currently based in Leeds but has plans to expand its operations by setting up another depot in the south of England. The management team has identified four possible locations for the depot and these are listed in the decision matrix below. As a first step they have decided to use a multi-criteria analysis (MCA) to rank the options. After much discussion, the team have decided on three key criteria (Cost, Accessibility and Environmental Impact) against which to judge the options and have agreed on the ratings shown in the matrix, below (running from 4 for the best to 1 for worst under each criterion). The criteria have been weighted as follows: Cost (0.45), Accessibility (0.35) and Environmental Impact (0.2).

Don't use plagiarized sources. Get Your Custom Essay on
Business decision making
Just from $13/Page
Order Essay
Option Cost Accessibility Environmental Impact
Bristol 4 2 1
Reading 3 3 2
Swindon 1 4 3
Chelmsford 2 1 4


  • Given the information above, which location would you advise Tolkien Transport to choose? Show your workings.
  • Explain to Tolkien Transport the limitations of a multi-criteria analysis for a decision problem of this kind.

Question 2

Tolkien’s marketing manager has been asked to develop a new promotional strategy for the company, which has been facing stiff competition from some new transport companies. After much research she has narrowed down the choice to three strategies and has constructed the decision tree shown below – which includes the payoffs and probabilities she has managed to estimate – but it is incomplete. She has identified three alternative promotional strategies (and their upfront cost): customer referral programme (£35,000); causes and charity (£30,000); branded gifts (£50,000). The impact on turnover in each case depends on the ‘reach’ of the promotional campaigns which could be high, medium or low. The payoffs represent the increase in annual sales turnover in £000s over a one-year period (excluding up-front costs).



  • Complete the decision tree by providing the value of all missing elements (shown as A, B, C, D, all marked with a *).
  • Use the decision tree to advise the marketing manager on the best option to choose, assuming the company wishes to maximize expected annual sales turnover, net of upfront costs.

Question 3

Tolkien Transport has a small facility adjacent to its Leeds depot which it uses to manufacture tarpaulins for its lorries. The facility currently produces 3000 tarpaulins a year. The company’s Finance Manager has estimated the cost per tarpaulin at this level of output to be:

  Cost per unit
Direct Materials £50
Direct Labour (cutting, trimming and sewing) £45
Variable manufacturing overhead £37
Fixed manufacturing overhead £43

An outside supplier has offered to supply all the tarpaulins required by Tolkien for £145 each. If Tolkien decided not to make the tarpaulins, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided.


  • Calculate how much higher or lower Tolkien’s net operating income would be if it purchased the tarpaulins from the outside supplier, showing all calculations. Would you advise Tolkien to accept the offer?
  • Clearly explain to Tolkien’s Finance Manager how opportunity cost might affect the make or buy decision. Illustrate with a numerical example.

Essay Assign
Calculate your paper price
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All our papers are original and written from scratch. We will email you a plagiarism report alongside your completed paper once done.

Free Revisions

All papers are submitted ahead of time. We do this to allow you time to point out any area you would need revision on, and help you for free.


A title page preceeds all your paper content. Here, you put all your personal information and this we give out for free.


Without a reference/bibliography page, any academic paper is incomplete and doesnt qualify for grading. We also offer this for free.

Originality & Security

At Essay Assign, we take confidentiality seriously and all your personal information is stored safely and do not share it with third parties for any reasons whatsoever. Our work is original and we send plagiarism reports alongside every paper.

24/7 Customer Support

Our agents are online 24/7. Feel free to contact us through email or talk to our live agents.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We work around the clock to see best customer experience.


Flexible Pricing

Our prices are pocket friendly and you can do partial payments. When that is not enough, we have a free enquiry service.


Admission help & Client-Writer Contact

When you need to elaborate something further to your writer, we provide that button.


Paper Submission

We take deadlines seriously and our papers are submitted ahead of time. We are happy to assist you in case of any adjustments needed.


Customer Feedback

Your feedback, good or bad is of great concern to us and we take it very seriously. We are, therefore, constantly adjusting our policies to ensure best customer/writer experience.