Case Study - Week 4: Southwestern University
Case Study:
Southwestern University: F The recent success of Southwestern University’s football program is causing SWU’s president, Joel Wisner, more problems than he faced during the team’s losing era in the early 1990s. For one thing, increasing game-day attendance is squeezing the town of Stephenville, Texas and the campus. Complaints are arising over parking, seating, concession prices, and even a shortage of programs at some games. Dr. Wisner, once again, turns to his stadium manager, Hank Maddux. This time, he needs a guaranteed revenue stream to help fuel the stadium expansion. One source of income could easily be the high-profit game programs. Selling for $6 each, programs are a tricky business. Under substantial pressure from Wisner, Maddux knows he has to ensure that costs are held to a minimum and contribution to the new expansion maximized. As a result, Maddux wants the programs for each game to be purchased economically. His inquiries have yielded two options. A local Stephenville printer, Sam Taylor of Quality Printing, has offered the following discount schedule for the programs and game inserts: Programs Weekly Game Detail Inserts 10,000 to 30,000 $2.00 each 10,000 to 30,000 $1.00 30,000 to 60,000 $1.90 each 30,000 to 60,000 $0.95 60,000 to 250,000 $1.80 each 60,000 to 250,000 $0.90 250,000 and up $1.50 each 250,000 and up $0.85 As a second option, however, First Printing, owned by Michael Shader, an S.W.U. alumnus in Ft. Worth, will do the job for 10% less as a favor to help the athletic department. This option will mean sending a truck to Ft. Worth to pick up each order. Maddux estimates that the cost of each trip to Ft. Worth will be $250. Maddux’s other major problem is he is never sure what the demand for programs will be. Sales vary from opponent to opponent and how well the team is doing that year. However, he does know that running out is a very bad idea. This football team is not only expected to make money for SWU, but it is also
Southwestern University: F The recent success of Southwestern University’s football program is causing SWU’s president, Joel Wisner, more problems than he faced during the team’s losing era in the early 1990s. For one thing, increasing game-day attendance is squeezing the town of Stephenville, Texas and the campus. Complaints are arising over parking, seating, concession prices, and even a shortage of programs at some games. Dr. Wisner, once again, turns to his stadium manager, Hank Maddux. This time, he needs a guaranteed revenue stream to help fuel the stadium expansion. One source of income could easily be the high-profit game programs. Selling for $6 each, programs are a tricky business. Under substantial pressure from Wisner, Maddux knows he has to ensure that costs are held to a minimum and contribution to the new expansion maximized. As a result, Maddux wants the programs for each game to be purchased economically. His inquiries have yielded two options. A local Stephenville printer, Sam Taylor of Quality Printing, has offered the following discount schedule for the programs and game inserts: Programs Weekly Game Detail Inserts 10,000 to 30,000 $2.00 each 10,000 to 30,000 $1.00 30,000 to 60,000 $1.90 each 30,000 to 60,000 $0.95 60,000 to 250,000 $1.80 each 60,000 to 250,000 $0.90 250,000 and up $1.50 each 250,000 and up $0.85 As a second option, however, First Printing, owned by Michael Shader, an S.W.U. alumnus in Ft. Worth, will do the job for 10% less as a favor to help the athletic department. This option will mean sending a truck to Ft. Worth to pick up each order. Maddux estimates that the cost of each trip to Ft. Worth will be $250. Maddux’s other major problem is he is never sure what the demand for programs will be. Sales vary from opponent to opponent and how well the team is doing that year. However, he does know that running out is a very bad idea. This football team is not only expected to make money for SWU, but it is also