# Managerial Decision Making

Section Case Study: Read “George’s T-Shirts” beginning on page 267 and analyze the following questions:
GEORGE’S T-SHIRTS
prices. The estimate had arrived yesterday. It waspresented in the usual batches of 2,500 shirts with theusual volume discounts:

Order Size – 10000 , 7500, 5000

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The order had to be one of the quoted multiples of2,500 shirts.On the basis of his volume estimates, Lassiter wasprepared to place an order for 5,000 shirts. With his salesgenerally about 10 percent of attendance, he didn’t believe he could justify an order for 7,500 shirts. Such anorder would require the concert’sattendancetobe75,000, and while he was optimistic about the popularityof the event, he wasn’t quite that optimistic. Also, in thepast,hehad takenthe conservativeroute and ithad servedhim well. He had never had an appreciable number ofshirts left over, but those that were left were sold to adiscount clothing chain for \$1.50 per shirt.

1.What are the possible financial outcomes if Lassiter orders 5000 T-shirts? 7,500? 10,000?
2.How many T-shirts should Lassiter order?
Decision Making

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