Question
Big Al's is adapting to consumer trends and developing a wicking, breathable T shirt made of polyester and elastane blend material to keep consumers cool
Big Al's is adapting to consumer trends and developing a wicking, breathable T shirt made of polyester and elastane blend material to keep consumers cool on the hottest of days (especially important in Florida). The shirt will cost $20 to produce and Big Al's expects Dick's will be selling it for $48. First year sales of the new shirt are expected to be 25,000, with 30% of those sales coming from the existing T shirt. Distribution will remain the same. Distributors will be taking 25% and retailers will take the same percentage margin as they do on the base cotton T Shirt. Big Al's will also have to continue paying UF a $2 licensing fee for every shirt sold to distributors. Based strictly on economics, would you advise Big Al's to sell these shirts? Why or Why Not? Sell or Not Sell?_______________________________________________________________ Why or Why Not? _____________________________________________________________
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