Suppose that in problem 35, Rachel can spend $1,000 to buy a well-placed booth at the concert.

Question:

Suppose that in problem 35, Rachel can spend $1,000 to buy a well-placed booth at the concert. Doing so would raise the expected sales of T-shirts from 1,000 to 1,200 and lower the standard deviation of demand from 100 to 50. 

a. Should she decide to pursue this option, how many T-shirts should Rachel make?
b. Should Rachel spend the money for the better placed booth?


DATA FROM PROBLEM 35:

Rachel is making T-shirts that she hopes to sell at the upcoming “War on War” concert. The T-shirts cost $6 each to produce, and she will price them at $20 each. She expects that she can donate any unsold T-shirts to a local charity for a tax write-off of $2 each. Based on her experience at past concerts, Rachel expects to sell 1,000 T-shirts, with a standard deviation of 100 T-shirts.

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Related Book For  answer-question

Managing Operations Across The Supply Chain

ISBN: 9781260547634

4th Edition

Authors: Morgan Swink, Steven Melnyk, Janet L. Hartley, M. Bixby Cooper

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