A trend chart was produced by RSPE software and is shown below. Profit was defined as the output variable. In reference to the chart below, which of the following statements is true?
|The best choice is an order quantity of 70 because the range of possible results is the greatest.|
|An order quantity of 40 is the lowest risk option to select.|
|The highest expected value result is when an order quantity of 65 is selected.|
|An order quantity of $65 is the most that can be expected.|
|All of the above.|
An order quantity of 40 is the lowest risk option to select
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Question & Answer: A trend chart was produced by RSPE software and is shown below. Profit was defined…..
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The above is the only correct option. Regarding first statement, although the order quantity of 70 has the greatest range of possible results, it is not the best choice, because the expected mean profit is not the highest. Statement three is incorrect, because highest expected value is when order quantit