Bought exclusive rights to broadcast rose bowl games

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1. Why is it important to understand your current business processes before trying to improve them? Why might it be difficult for a group of workers to come to an agreement about what their current business processes are?

2. Trojan SPorts Network (TSPN) have recently bought exclusive rights to broadcast Rose Bowl games. TSPN’s profit is solely generated from advertisements and there are 100 ad slots available during the upcoming Rose Bowl. Assume that one firm can only buy one slot. For the next two parts, suppose that TSPN offers two types of contracts—type A and type B. ? Type A contracts are made before the season begins and priced at $110,000 per slot. Assume there is enough demand for type A contracts (i.e., TSPN can sell as many Type A as they want). ? TSPN sells type B contracts on the spot market. That is, after the season begins TS sells ad slots that are remaining to firms who did not buy slots before the season begins. Type B contracts are priced at $180,000 per slot. Suppose demand for Type B contracts is equally likely to be 1, 2, …, 40 (i.e, distributed uniformly between 1 and 40).

a) Suppose there are 20 slots left. Should TSPN sell a Type A contract?

Reference no: EM132233969

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