Additionally 9% of the estimated value of tickets being sold, 50,600, is 4,554 in shirt sales. This brings a total of 6,354 in shirt sales for Mr. Lassiter. This number falls right in between the 5,000 and 7,500 order sizes that Mr. Lassiter can order shirts from his supplier in. On one hand he can pretty much be guaranteed that he will sell all 5,000 and make $23,900 in profit if he chooses to buy that amount; (4.78x5000=23900). He could potentially lose sales of 1,354 shirts totaling about $6,716 in pure profit; (25250/7500=3.37; 8.33-3.37=4.96 *which is the 7500 amount of per shirt profit; …show more content…
Which Mr. Lassiter could sell to the discount clothing chain for $1,719, (1146*1.5=1719). If he buys 7500 for $25,250 or $3.37 a shirt and sells them all he will make $38,850; (4.96*7500=35850). He may still have the 1,146 left over shirts since the prediction is only to sell 6,354 shirts which may cost him $3,862; (3.37x1146=3862.02), but would make $1,719 back by selling them to the discount clothing chain putting his losses at only $2,139; (3859.0-1719=2139.2). This would also bring his profit down to $33,711; (35850-2143=33710.8). So, his loss is only 6% of his profit;