What should be an optimal order size

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Reference no: EM131632047

Suppose SAA at Georgia Tech has 200 members, and the board members are planning to give souvenir mugs at the next event to the members who attends. The order will be given to a painting company at $7 per mug, and this will be added to the price of the ticket. The club is demanding an advance RSVP 5 days in advance so that they know the exact number of members attending. Current number of RSVPs is 130, and probability of attendance for each of the remaining members is 0. 7. 8 days before the event, the painting company offers the club to take an advance order for the reduced price of $5 per mug. If the club does not accept this, it can also place an order for additional mugs at the original price of $7 per mug later. Determine whether the club management should place an advance order or not, and if they do, what should be an optimal order size?

Reference no: EM131632047

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