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YB Sporting Apparel prints up novelty T-shirts commemorating major spons events (e.g.,the Super Bowl, the World Series, Northwestem University winning the NCAA BasketballToumament). The T-shirts

YB Sporting Apparel prints up novelty T-shirts commemorating major spons events (e.g.,the Super Bowl, the World Series, Northwestem University winning the NCAA BasketballToumament). The T-shirts cost $5 to make and distribute and sell for $20. Company policyis to dispose of any excess inventory after the event by discounting the T-shins by 80percent, that is, sell them for $4. In 1994, YB printed shirts for the World Cup soccer playoffs in Chicago. It estimated demand at 12,000 shirts, with a signi cant amount ofuncertainty. Because of this uncertainty, YB printed only 10,000 shirts. What do you think ofthis decision? What quantity would you have recommended printing?

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