Question: 1.You will need Interactive Illustration 1 to answer this question. Let's assume that we have a product with Price = 7.8 and Cost = 5.9

1.You will need Interactive Illustration 1 to answer this question. Let's assume that we have a product with Price = 7.8 and Cost = 5.9 product with a Salvage Value = 0.0. (This is a classic low margin product.) The mean "Early Season Customer Demand" is 2,500 units with a standard deviation of 800. The mean "Late Season Customer Demand" is 8,000 units with a standard deviation of 2,700. Fortunately, there's a perfect 1.0 "Correlation of Demand Between Periods" (that is, early season demand perfectly predicts late season demand). What is the approximate "Percent Improvement in Profits" when using a Read-React process instead of a One Order Period process?

Group of answer choices

Read-React loses about -10% more profit than One Order Period.

Read-React is no more profitable than One Order Period.

Read-React loses about -35% more profit than One Order Period.

Read-React earns about 40% more in profits.

Read-React earns about 75% more in profits.

2.You will need Interactive Illustration 1 to answer this question. Let's assume that we have a product with Price = 11.8 and Cost = 4.2 product with a Salvage Value = 2.0. (This is a high margin product.) The mean "Early Season Customer Demand" is 2,000 units with a standard deviation of 100. The mean "Late Season Customer Demand" is 6,000 units with a standard deviation of 1,000. Fortunately, there's 0.0 "Correlation of Demand Between Periods" (that is, no relationship between early season demand and late season demand).

What is the approximate "Percent Improvement in Profits" when using a Read-React process instead of a One Order Period process?

Group of answer choices

Read-React loses about -35% more profit than One Order Period.

Read-React earns about 25% more in profits.

Read-React earns about 125% more in profits.

Read-React loses about -75% more profit than One Order Period.

Read-React is no more profitable than One Order Period.

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