$01.$ At what order quantity is the maximum profit expected to occur given the probabilities for demand?

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a$.1000$

b$.2000$

c$.3000$

d$.$ none of the above

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Question $2$

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$02.$ For a demand of $2000,$ what order quantity will result in a break$-$even profit? What will happen if more than this quantity is ordered? Hint: Use goal seek.

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a$.4403$; more than this will result in negative profit

b$.3404$; more than this will result in negative profit

c$.4403$; more than this will not affect profit

d$.$ none of the above

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Question $3$

$03.$ For what order quantity does the maximum profit occur when the probabilities for the possible demand values are all equal?

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a$.2000$

b$.3000$

c$.4000$

d$.$ none of the above

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Question $4$

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$04.$ As the unit cost of production increases, does profit become more sensitive$,$ less sensitive$,$ or maintain a constant sensitivity to changes in unit cost?

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a$.$ profit becomes more sensitive

b$.$ profit becomes less sensitive

c$.$ profit maintains a constant sensitivity

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Question $5$

$05.$ Calculate the mean absolute percentage errors for power and exponential curves. Which of the three models, linear, power, or exponential, best fits the data?

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a$.$ linear

b$.$ power

c$.$ exponential

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Question $6$

$06.$ What is the best price and maximum profit predicted by the power model assuming the unit cost of product is $$250?$ Hint: You will need to update the model parameters and the formula used to calculate demand on Sheet $2.$

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a$.$ Best price $=$ $$400$ and Maximum profit $=$ $$967,122\mathrm{.}36$

b$.$ Best price $=$ $$420$ and Maximum profit $=$ $$464,422\mathrm{.}52$

c$.$ Best price $=$ $$520$ and Maximum profit $=$ $$1,041,186\mathrm{.}71$

d$.$ none of the above

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Question $7$

$07.$ Which has a greater present value: the gross margin for year $1$ or the gross margin for year $8($the peak year for gross margin$)?$

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a$.$ year $1$

b$.$ year $4$

c$.$ year $8$

d$.$ none of the above

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Question $8$

$08.$ What is the present value of the gross margin at year $16?$

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a$.$ $$532,317$

b$.$ $$602,359$

c$.$ $$1,420,000$

d$.$ $$1,496,630$

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Question $9$

$09.$ What rate of increase is needed from year $1$ through year $8$ to have a year $8$ gross margin with a present value that is equal to the present value of the year $1$ gross margin? Hint: Use goal seek.

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a$.4\mathrm{.}0\%$

b$.5\mathrm{.}5\%$

c$.6\mathrm{.}0\%$

d$.7\mathrm{.}5\%$