Using JIT to minimize waste and lost opportunity Daisy Tang is the editor-in-chief of her school’s yearbook. The school has 750 students and 50 faculty and staff members. The firm engaged to print copies of the yearbook charges the school $10 per book and requires a 10-day lead time for delivery. Daisy and her editors plan to order 600 copies to sell at the school fair for $15 each.

Required

a. If the school sells 550 yearbooks, what amount of profit will it earn? What is the cost of waste due to excess inventory?

b. If 150 buyers are turned away after all yearbooks have been sold, what amount of profit will the school earn? What amount of opportunity cost will the school incur?

c. How could Daisy use a JIT inventory system to maximize profits by eliminating waste and opportunity cost?