Craddock

Background: The Craddock Cup is a premier high school soccer tournament, consisting of 32 teams, run over two days. The cup has become a recruitment opportunity for soccer scouts which has enabled the tournament to attract the very best teams and players from around the region. The tournament brings an influx of people into the city and local businesses within the community have profited from this each year.

Main Issue or Problem: Whilst the tournament has the prestige to appeal to corporate sponsors, funding from this source has remained difficult to obtain. The costs are expected to continue to rise each year which is not sustainable. CYSL are at risk of cancelling the cup if the general manager is not able to find a way to turn it around.

Three Possible Mutually Exclusive Alternatives that Might be used to Solve the Problem (these must not include the status quo (current practice) and should include at least one alternative that is not mentioned in the case):

Alternative Quantitative Techniques that you would use + Reason Qualitative Issues that you could discuss + Reason Suggested reading (pages) in HDR15 (2015)

1.

Increase the quantity and price of t-shirts being sold

Break-Even Point and Targeting Operating Income

Can budget for the BE point of t-shirts sold as well increase the selling price to target operating income to cover additional costs and make a profit

Increase in quantity equals increase in costs and an increase in price equals a possible downturn in sales, however this is offset by purchasing various styled t-shirts that appeal to both players, supporters and soccer clinic kids

2.

Allocation of CYSL salaries and rent

Cost allocation

The cost of salary and utilities would be more accurately appropriated if it were based on

3.

Increase the fee of the soccer clinic

Sensitivity Analysis and Margin of Safety

Using the clinic to generate a targeted income There could...