Case Article—Beijing Opera Mask Sales in Four Cities in the United States

Abstract

The Beijing Opera Theater Company organizes four shows a year in the United States, each in a different city. The company sells two styles of souvenir masks during each show. The case narrative is created as the retail manager of the Beijing Opera Theater Company consults her previous MBA professor to seek guidance on available resources to make cost- and service-effective ordering decisions. Available information includes historic demand data of masks and relevant costs and revenues. Other issues discussed include development of a demand forecast for a new site, analysis of the impact of exchange rate fluctuations on the orders, and leftover shipping options. EasyFitXL, a module of Excel, is used to conduct all analyses to arrive at final decisions. The methodology used to solve the case is the newsvendor model, which is appropriate for making ordering decisions in respect to seasonal, perishable, and short life-cycle items that face uncertain demand. The case requires curve-fitting skills and use of expertise related to the the newsvendor model. It can be utilized by faculty, students, consultants, and practitioners in the areas of operations and supply chain management, operations research, management science, quantitative methods, and industrial engineering to enhance inventory planning expertise. Case Teaching Note: Interested Instructors please see the Instructor Materials page for access to the restricted materials. To maintain the integrity and usefulness of cases published in ITE, unapproved distribution of the case teaching notes and other restricted materials to any other party is prohibited.