KLT is a shampoo manufacturer. It costs $$1,000$ to set up$,$ produce, and bottle a batch of shampoos. The annual cost of holding the shampoo at the storage room is $$2$ per bottle. KLT can produce $150$ bottles per day. Selling one bottle of shampoo can yield a selling profit margin of $$1$ for KLT$.$ Assuming KLT operates $300$ days a year, the company is faced with two options.

Option $1$: Currently, the capacity of the storage room is $3,000$ bottles. It can use production policy to produce shampoos at the optimal run size. This option can meet an annual demand of shampoos of $12,000$ bottles. Production resumes when there is no inventory of shampoos in the storage room.

Option $2$: KLT can choose to expand the shampoo storage space to hold a maximum of $4,000$ bottles with a one$-$time expansion cost of $$500.$ With this expanded storage capacity, KLT can meet an annual demand of $18,000$ bottles. When the storage space is expanded, KLT adopts a production policy that continues producing shampoos until the new storage space, holding $4,000$ bottles, is fully filled. Production restarts when there is no inventory of shampoos in the storage room.

What option should KLT choose based on evaluating profits of the two options? What is the profit difference between the two options?