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In the Ordering NCAA T-Shirt problem discussed in class, start with the initial assumptions and make the following modification. (Copy the worksheet and make the
In the Ordering NCAA T-Shirt problem discussed in class, start with the initial assumptions and make the following modification. (Copy the worksheet and make the corresponding modification). Randy realized that the demand for the t-shirt depends on the full selling price of the t-shirt. From his prior experience, he knows that the demand has never exceeded 3000 t-shirts. He also knows that at the price of $15 there would be no demand for his t-shirts and below $15 he can sell an additional 200 tshirts for every $1 reduction in price. So, for simplicity, he assumes that the demand relationship is expressed by a linear equation resulting in the following equation for the demand for t-shirts: Demand for t-shirts = 3000 - 200* Full Price for t-shirt Note that this equation is valid for prices between $0 and $15. Assume also that prices are changed in the increment of only one dollar. a. Find the break-even prices (there are two of them - one corresponds to minimum price and the other corresponds to maximum price) for a given order quantity, say 1000? b. Develop a two-way data table and examine the sensitivity of price and order quantity to the profit
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