Sоcks, Inc. is а lоcаl business with three running sоck design options from which to choose. The mаrketing manager believes there is a 62% probability of a good market. Figure 1 and Table 1 show the demand forecasts and profit per customer order. Assume 100% yields and no discounts. Figure 1. Decision Tree for Running Sock Order Forecasts and Projected Profit/Order Table 1. Running Sock Order Forecasts and Projected Profit/Order Design Good Market Forecast Good Market Profit/Order Poor Market Forecast Poor Market Profit/Order 1 900 orders $12.50/order 700 orders $12.50/order 2 1,000 orders $11.50/order 800 orders $11.50/order 3 1,100 orders $10.50/order 900 orders $10.50/order 1a) Using Table 1, the running sock design 1 profit forecast for a good market is $[Q1D1GoodProfit]. 1b) Using Table 1, the running sock design 1 profit forecast for a poor market is $[Q1D1PoorProfit]. 1c) Using Table 1, the total expected profit from running sock design 1 is $[Q1EMV1]. 1d) Using Table 1, the running sock design 2 profit forecast for a good market is $[Q1D2GoodProfit]. 1e) Using Table 1, the running sock design 2 profit forecast for a poor market is $[Q1D2PoorProfit]. 1f) Using Table 1, the total expected profit from running sock design 2 is $[Q1EMV2]. 1g) Using Table 1, the running sock design 3 profit forecast for a good market is $[Q1D3GoodProfit]. 1h) Using Table 1, the running sock design 3 profit forecast for a poor market is $[Q1D3PoorProfit]. 1i) Using Table 1, the total expected profit from running sock design 3 is $[Q1EMV3]. 1j) Using Table 1, the decision tree analysis recommendation for the running sock design is [Q1DesignRec].
Cоrrelаtiоn implies cаusаtiоn, meaning that if two variables change together, one must be causing the change in the other.