George's T-Shirts

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George’s T-Shirts By

Quantitative Analysis for Managers (MANA 6302 - NI)

George Lassiter, a project manager for a defensive contract was also an owner for a successful side business of designing and manufacturing T-Shirts for special events for the past six years. He sold the T-Shirts to his vendors for $100 a dozen, while they sold them for $10 each making a profit of $1.67 on each shirt. This report is surrounded by a problem faced by George about decisions concerned about the appropriate number of T-Shirts to be produced for the upcoming rock concert that was proposed in two months from the time of the offer. Initially, he faced two uncertainties. 1. The number of people that would attend the concert was unknown and 2. How many people who attended the concert will actually buy the T-Shirts? Though he knew that the total tickets for the standing area sold were 20,000, he was unsure about the total tickets for seating to be sold. However, the approximate estimate for maximum number of tickets sold is 80,000, medium number of tickets to be sold is 50,000 and least number of tickets sold is 20,000. Irrespective of all the above uncertainties one thing that was certain was that the concert was assumed to be a huge success as per the information that reflected in the case. Therefore this brings George to eliminate the option that very less number of people would attend the show and hence evaluate for medium to high number of people to attend he show. This is when George made approximations about the required number of T-Shirts and the total cost for manufacturing them. He assumed that for 10,000, 7,500, or 5,000 shirts it would cost $32,125, $25,250 and $17,750 approximately. All the figures represented are just rough assumptions made by him. Further he could calculate the EMV for each of the assumed number of shirts required to be manufacture for the show. Since the volume of sales is assumed to be proportional to the number of attendees, the Expected Monitory Values for 5,000 shirts, 7,500 shirts and 10,000 shirts can be calculate where it is further assumed for three more possibilities as grandstand seating to be 40,000, 70,000 and 100,000 ranging from low to high. EMV for “5000” shirts
100,000 Seats
40,000 Seats
70,000 Seats
10% attend, Cost $10,250.
10% attend, Cost $14,350
10% attend, Cost $14350
5% attend, Cost $1,025
5% attend, Cost $7175
5% attend, Cost $4100

15% attend Cost $2391.67
15% attend, Cost $23916.67
15% attend, Cost $2391.67

Total Cost $23916.67

Total Cost $20841.67

Total Cost $13666.67

Total EMV $19816.67

EMV for “7500” shirts

100,000 Seats
40,000 Seats
70,000 Seats
10% attend, Cost $8000.00
10% attend, Cost $9850.00
10% attend, Cost $22350.00
5% attend, Cost ($100)
5% attend, Cost $6050.00
5% attend, Cost $2975.00

15% attend Cost $2700.00
15% attend, Cost $3725.00
15% attend, Cost $1641.67

Total Cost $32125.00

Total Cost $14466.67

Total Cost $10600.00

Total EMV $17914.58

EMV for “10,000” shirts

100,000 Seats
40,000 Seats
70,000 Seats
10% attend, Cost $6,125.00
10% attend, Cost $15,725
10% attend, Cost $30725
5% attend, Cost ($1,037.50)
5% attend, Cost $5112.50
5% attend, Cost $2037.50

15% attend Cost $2,387.50
15% attend, Cost $5120.83
15% attend, Cost $5120.83

Total Cost $40958.33

Total Cost $22883.33

Total Cost $7475.00

Total EMV $23,550.00

From the above decision trees we can evaluate for the total EMV depending on the number of T-shirts that would be...
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