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1. John is looking into buying a used car. John has two options: - Honda Civic at 15000$ which gives a mileage of 26 miles/Gallon. - Toyota Corolla at 20000$ which gives a mileage of 33 miles/Gallon.John is not sure about both the mileage and fuel price. The uncertainty of mileage is that of Table and Fuel price uncertainty follows beta distribution with pessimistic price being 3.92$/Gallon, most likely being 3.55$/Gallon and optimistic price being 3.01$/Gallon. 1. Determine the low cost car for John and draw a graph illustrating a crossover or indifference or break even point?Table Mileage and their probabilitiesProbability John would be travelling0.1 50000 miles0.3 75000 miles0.35 100000 miles0.25 200000 milesQuestion 2. The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are D = 600 units, S = $20/order and I = 20% of item price. Price is established by the Table 3 quantity discount schedule. What should the order quantity be in order to minimize the total annual cost?Quantity discount scheduleQuantity 1 to 49 50 to 249 250 and upPrice $5.00 per unit $4.50 per unit $4.10 per unit
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