MINI-CASE

Randy Karsten is the Children's Toys Purchasing Manager at Target, Inc.Whizbang has the potential to be a highly successful new toy.In the rush to get the product to market, the manufacturer of Whizbangs failed to file for either a US patent or a global patent. The product (toy), therefore, can be manufactured by anyone without incurring legal penalties or paying royalties to Whizbangs.

Competition has been fierce from offshore manufacturers to bring the popular product to the US market, resulting in a world price-point that is lower than Whizbang's ability to manufacture domestically for a profit. Whizbang headquarters is in the home state of the US President who has put a 15% tariff on imported the Whizbang product.

For political reasons, not economic reasons, Mr. Karsten wants to order from the US manufacturer first, before ordering offshore product. In total, Mr. Karsten wants a total quantity of 6,100 Whizbangs. Regardless, Karsten will not pay more than $23.00 per unit.

Mr. Karsten has given you the task to analyze the supply and demand curves for various conditions (Exhibits I - IV), and determine the amount of product supplied from domestic producers along with off-shore manufacturers with the 15% tariff enacted (Exhibit V).