George T-shirt
Synopsis:
George Lassiter is a project engineer for a major defense contractor and also an entrepreneur who manufactures and designs special events T-shirts. He has owned this lucrative T-shirt business for six years and designed T-shirts for “special events” such as rock concerts, major sporting events, and special fund-raising events, provided cleverly designed, well-produced, and reasonably priced products. His product was not endorsed by event sponsors. He sold the shirts to his regular crew of vendors for $100 per dozen, and these vendors sold the public for $10 per shirt. Apart from this he was distributing his products on surrounding streets and parking lots. He wanted to sell his shirts on a rock concert that was going to be held in two months. He was sure that 20,000 tickets for the standing area around the stage would be bought by devoted fans, he was not sure of the number of people who will attend the concert, and the percentage of the attendees who will buy the shirts. George thought in terms of three possibilities specifically 80,000, 50,000 and 20,000 grand seats which he assumed to be high, medium and low respectively. The probability of 50,000 was as likely as either of the two possibilities combined. And 80,000 and 20,000 were about equally likely, or 80,000 were more likely than 20,000. He also thought regarding his designs and quality of the shirts, his sales could be ten percent (about 6 times out of 10), five percent, or fifteen (1 time out of 10) percent of the attendance.
Based on the information given in the case, the expected number of attendees is;
E(x) = 80,000*0.25 + 50,000*0.5 + 20,000*0.25 = 50,000 people
Standing Area Attendance 20,000
Selling price per shirt: $100/12 = $8.33
Sale Price of leftover T-shirts to discount clothing chain $1.50 Per T-shirt
George requested a cost estimate of shirts supply which is presented in the below table:
Order Size
Cost
5,000
$17,750
7,500
$25,250
10,000
George Lassiter is a project engineer for a major defense contractor and also an entrepreneur who manufactures and designs special events T-shirts. He has owned this lucrative T-shirt business for six years and designed T-shirts for “special events” such as rock concerts, major sporting events, and special fund-raising events, provided cleverly designed, well-produced, and reasonably priced products. His product was not endorsed by event sponsors. He sold the shirts to his regular crew of vendors for $100 per dozen, and these vendors sold the public for $10 per shirt. Apart from this he was distributing his products on surrounding streets and parking lots. He wanted to sell his shirts on a rock concert that was going to be held in two months. He was sure that 20,000 tickets for the standing area around the stage would be bought by devoted fans, he was not sure of the number of people who will attend the concert, and the percentage of the attendees who will buy the shirts. George thought in terms of three possibilities specifically 80,000, 50,000 and 20,000 grand seats which he assumed to be high, medium and low respectively. The probability of 50,000 was as likely as either of the two possibilities combined. And 80,000 and 20,000 were about equally likely, or 80,000 were more likely than 20,000. He also thought regarding his designs and quality of the shirts, his sales could be ten percent (about 6 times out of 10), five percent, or fifteen (1 time out of 10) percent of the attendance.
Based on the information given in the case, the expected number of attendees is;
E(x) = 80,000*0.25 + 50,000*0.5 + 20,000*0.25 = 50,000 people
Standing Area Attendance 20,000
Selling price per shirt: $100/12 = $8.33
Sale Price of leftover T-shirts to discount clothing chain $1.50 Per T-shirt
George requested a cost estimate of shirts supply which is presented in the below table:
Order Size
Cost
5,000
$17,750
7,500
$25,250
10,000