Management
The side business of George Lassiter has three alternatives for the special sale in the rock concert scheduled in the following two months. The alternatives depend on the public attendance to the rock concert. The standing area of 20,000 people will be sold with a probability of 100%. The second group is the grandstand seats which has three possibilities: 20,000; 50,000 and 80,000 public attendance. The t-shirt has a retail price of 10 USD and a procurement price between 3.21 USD and 3.55 USD, according to the volume of t-shirt acquisition to the distributor. The sale of the t-shirt after the day to the concert has low possibilities and the best alternative to Lassiter is to sell the t-shirt to retailers with a price of 1.5 USD per shirt. That means it is necessary to use a pessimist scenario (Boundless). The ratio of t-shirt sale per attendant is 10%, according to previous experiences in other concerts and public events. With the previous consideration, the number of t-shirts required for George Lassiter for the rock concert is 4,000 t-shirts.
The required order is 5,000 t-shirts with a total value of 17,750 USD. The cost per shirt 3.55 USD and the retail price is 10 USD. With the prevision of 4,000 t-shirts, the total sales of the concert will be 40,000 USD. The 1,000 t-shirts were not sold in the concert will be offered to discount stores with a price of 1.5 USD, that is a value of 1,500 USD Sale. The total sale for the concert and discount store is 41,500 USD with net revenue of 23,750 USD. With a sensibility analysis, George Lassiter must have a minimum sale of 1206 t-shirts to have a revenue zero in the event. The other alternatives are not convenient for Lassiter business due to the low discount price of the t-shirts.
Works Cited
Boundless. Evaluating Alternatives. 2016. 26 June 2016.
