Star Manufacturing makes a component called V2. Its customers are manufacturing firms. It offers a volume discount to some customers and currently, its salespeople decide whether an order is large enough to qualify for the discount. If the component needs to be exchanged or repaired, customers can come back within 10 days for free exchange or repair. Information about Star's four biggest customers follows: Customer A B D Revenues $ 931,500 $ 621,000 $ 550.000 $ 207,000 Discount 27,945 140,000 15,000 45,000 Cost of goods sold 605,475 403,650 357,500 134,550 Gross Profit 298,080 77,350 177.500 27,450 Customer-related costs Order taking 2,880 3,000 7,000 3,000 Product handling 6,064 10,000 14,000 10,000 Rush order processing 560 1.000 10,000 7,000 Exchange and repair 700 700 10,000 10,000 Profit 287,876 62,650 136,500 (2,550) Please note: Order taking costs may include: receipts of inquiries, preparing quotations and processing orders. Product handling costs may include: stock maintenance, warehousing, and orders dispatch. Required: 1. What is the profitability profile of each customer? (2 marks) 2. Based on your customer profitability profiles, should Star make any changes to the ways they allow customers A, B and C use their resources. If yes, what changes should Star implement, if not why not? (8 marks) 3. Should Star discontinue supplying to customer D? Why or why not? (4 marks) 4. Is Star's discount policy appropriate? Why or why not