Southwestern University EOQ – 2006
My suggestion for Maddux would be to place his order with First Printing for both the programs, and the inserts.
For the programs, Maddux should base his order on D=300,000. He should order 31,622 programs each order. This will equate to ten orders placed throughout the season, saving him over $45,000 compared to Quality Printing, and only cost him an extra $2,500 in pick-up costs.
For the inserts, Maddux should base his order on D=250,000. He should order 18,634 inserts with each order. This will equate to seven orders placed throughout the season, saving him over $10,000 compared to quality printing, and only costing him $1,750 in pick-up costs.
Maddux could save even more money on his pick-up costs by placing simultaneous orders and picking up inserts and programs in one trip.
Maddux’s total cost for the programs and inserts is $668,671.26. That includes pick-up costs.
Although there are more programs being ordered than inserts, there are still plenty of inserts being ordered based on the 2/3 demand. If total attendance for the season is 300,000, approximately 198,000 programs will be demanded. That leaves approximately 52,000 inserts in excess, and 100,000 programs. Programs can be used in promotions and other activities around campus and for alumni.
If I were Maddux, I would look into the parking problems our fans are having. Parking can garner very high profits with relatively low overhead. If you can buy a parcel of land within walking distance to the stadium, it only needs to be staffed on game-days, and you can charge whatever price you want. The closer you are to the stadium, the more you can charge for parking. I would also look into the seating problems. If people continue to pay to come the game, and are uncomfortable, eventually they will quit coming. People can get around concession prices by eating before and after the game. The seating situation can become a deterrent for...