Consider the retailer's position in the quantity flexibility contract problem discussed in the chapter with results in Table 14-6. Consider the base contract one in which a = 13 = 0.2, the order size is 1,000, and the wholesale price is $6. For the following questions, you will need to build a quantity flexibility model. Assume that salvage value is zero for both the retailer and the manufacturer.

(a) How much will profit increase for the retailer if a increases to 0.5?

(b) How much will profit increase for the retailer if [3 increases to 0.5 (keeping a at 0.2)?

(c) Why would you expect these to be different?