5. If the average sale price for one car is $20,000 and the average car costs $15,000 to acquire, how much profit is being lost each month as a result of poor forecasting?

Note: For ease of calculation, assume all cars arrive on the 1st and all cars remaining on the 31st are disposed of with a 50% markdown.

It is August 2008 and Speedy Automotive is one of four car dealerships located in rural Wyoming. The residents in the area replace their vehicles roughly every eight years.When they do replace their vehicles, they tend to visit the same dealership that sold themthe first one, building a relationship with the dealership. This has kept sales relatively stable for all the dealerships in the area. Recently, however, customers have begun expanding their shopping options. Speedy Automotive believes this is due to the rise of the Internet.
Customers have begun coming to the dealership with an exact idea of what car they would like and have a price in mind.When Speedy Automotive does not have themodel available or cannot meet the price, customers have started going to competitors.