George’s T-Shirts Analysis

“Case 24

George’s T-Shirts

Jingyi Zhang

Dallas Baptist University”

Executive Summary

  George Lassiter was a project engineer of a main defense contractor for the prior 6 years, but now he focus on a main project which is hawking, manufacturing and designing T-shirts for special event. Recently, he has had a project about producing special T- shirts for a rock concert, and the concert is in two month later. In this project, Lassiter has two unknown things. The first is that he does not know how many tickets would be sold, and he could just assume 3 different situations in 20,000,  50,000, 80,000. The other problem is that he is unable to know how many audiences would purchase his T- shirts, so he assumed that the percentage were 5%, 10%, and 15%.

Decision Problem

  Because George did not know how many people would come to the rock concert, so he did not know how many T- shirts he should produce and the percentage of customers who would purchase his shirts. Therefore, He needed to decide how many shirts he would produce to the concert.

Analysis of the Industry and the Company

  George’s T-shirts were not supported by event sponsors, and they did not allowed he sell those shirts in the area of event held on. However, George’s T- shirts is successful because he went to the street and parking lots where near than stages to sell his shirts and he did a good job due to the wonderful design and good qualities. In this case, he is focusing on a rock concert, which will be showed in two month later, and he needs to decide how many shirts to be produced for the concert. The right decision will help his business to be better; otherwise he will earn less profit.

Possible Decision Alternatives

  According to the information in textbook, there are 3 alternatives of different sizes, which are 10,000 with $32,125, 7500 with $25,250, 5000 with $17,750. A decision would help us to understand those alternatives, and according to the tree, we know that he has 27 alternatives.

[pic 1]

Evaluation of Alternatives

  In this case, George needs to use EMV to calculate the best alternative in order to maximum the profit. Also, he should consider about the relevant monetary flow because he needs to know how much he can earn in different alternatives. For the EMV calculation, the situation of 10,000 could get $26574.17, the situation of 7500 could get $25257.5, and the situation of 5000 could get $20329.17.