1. In 1992, Eyefresh (a subsidiary of Johnson &Johnson) launched the first disposable contact lens, KeenVue, which was produced by a unique proprietary manufacturing process at a cost of S0.50 per lens. Patients wore these lenses for 1 week, threw them away, and inserted another pair. By 1990, the health risks of extended wear lenses led some Eye Care Professionals (ECPs) to recommend that patients remove and clean KeenVue lenses each night replacing them after two weeks. So in 1991, Eyefresh launched SharpVue disposable lenses which were specifically designed for this type of usage. They were priced the same as KeenVue, $2.50 to ECPs and $4.50 per lens to end users. In 1993, Eyefresh planned to launch One Day KeenVue, daily wear, single-use, truly disposable lenses that offer both convenience and reduced health risk. Each One Day lens cost S0.25 to manufacture and was priced at $0.65 to ECPs, and $0.83 to end users. 5 Points 1.1: Which of the three products is most profitable? 1.2: Which of the three products is most profitable after accounting for differences in usage rates? 1.3: What more can Contribution Analysis tell us about the challenges One Day might face? Hint: Organizing the information for each product in a single table helps to compare and draw inferences SharpVue Keen Vue One Day INFORMATION ON LENS Replacement Time Annual Usage (full compliance) INFORMATION ON ECP ECP Price to Patients Eyefresh Price to ECP Unit Cost ECP Unit Contribution Annual ECP Contribution INFORMATION ON EYEFRESH Eyefresh Unit Contribution Total Unit Contribution Annual Eyefresh Contribution Total Annual Contribution Annual Cost to Patient