Case Background

George Lassiter makes t-shirts pertaining to special events just like concerts. The upcoming live show presents an additional opportunity for George to make promote t-shirts; even so the question is usually how many t-shirts to generate. There are two fundamental circumstance questions that needs to be answered: 1 . What are the possible financial outcomes if Lassiter orders 5, 000 T-shirts? six, 500? twelve, 000? While shown in the Exhibit, a rather simple although detailed decision tree continues to be made which in turn represents the various options to get George. The financial outcomes for the three different amounts of t-shirts that he can give are presented in tabular form, in the Appendix. Desk 1 shows profit final results for placing your order 5000 t shirts, Table a couple of shows earnings outcomes pertaining to ordering 7500 shirts, and Table three or more shows income outcomes intended for ordering 12, 000 t-shirts. Another conceivable decision to get George was to provide 15, 000 tee shirts. In the case wherever demand was high plus the percentage of fans whom bought the shirts was 15%, George could make high earnings. Therefore , we all considered the chance of ordering 15, 000 t-shirts in two batches – 5000 t shirts and 15, 000 shirts. Ordering two batches of 7500 shirts would also yield a similar result, good results . a slightly higher cost; therefore , it was ignored. The actual result for this case is demonstrated in Table 4. 2 . How a large number of T-shirts ought to Lassiter buy?

To come up with a response for George's dilemma, we made a decision forest listing each of the possible decisions, chances, and outcomes. This included the 15, 1000 shirts choice as well. Following rolling back the decision forest, the highest Predicted Monetary Value (EMV) came out being $26, 574 for the ‘Order 10, 000 shirts' decision. It has to be taken into account that while there was an equal likelihood of 80, 000 and twenty, 000 grandstand seats, George felt that there was a very slightly higher probability of 80, 000 seats just for this concert. This intuition has become reflected inside the tree picture with possibilities for the higher extreme and lower severe as 30%...

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