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Algebra project - produce a rock concert

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Slide1:

By: Niloy Shah, Asit Shah, and Chris Long

Problem:

Problem We were hired by Sam to advise him in producing a rock concert. We are to advise Sam on which band, stadium, and ticket price will bring in the most profit. You are assigned to come up with a final conclusion that you will report to me.

Task 1: Revenue Model Assume: \$20 ticket price Model: R = price x number of tickets sold n= number of tickets sold R = 20n

Task 2: Cost Model Fixed Costs (F)‏ Costs that stay the same no matter how many tickets are sold. Variable Costs (V)‏ Costs that vary as the number of tickets sold varies.

Task 2: Cost Model cont. Sample Fixed Cost Models Example 1 - Ms Teak \$75,000 - Cotton Bowl \$75,000 - Other \$55,000 - Total \$205,000

Task 2: Cost Model cont. Example 2 - Dixie Chickens \$88,000 - Starplex \$60,000 - Other \$55,000 - Total \$203,000

Task 2: Cost Model cont. Example 3 - Dixie Chickens \$88,000 - Cotton Bowl \$75,000 - Other \$55,000 - Total \$218,000

Task 2: Cost Model cont. V = Variable Cost m = unit rate n = number of tickets sold C = Cost F = Fixed Cost V = mn C = V + F Therefore C = mn +F

Ms. Teak at Cotton Bowl:

Ms. Teak at Cotton Bowl

Dixie Chickens at Starplex:

Dixie Chickens at Starplex

Dixie Chickens at Cotton Bowl:

Dixie Chickens at Cotton Bowl

Task 3: Profit Model Scenario: Who’s That at Cotton Bowl \$20 ticket price Fixed Costs Cotton Bowl \$75,000 Who’s That \$48,000 Other Fixed \$55,000 Total Fixed \$178,000 Variable Cost \$4.50 per ticket sold Total Costs c = 4.5n + 178,000 Revenue \$20n Breakeven (profit = 0)‏ R = c 20n= 4.5n+ 178,000 15.5n= 178,000

Profit Model of Scenario:

Profit Model of Scenario

Task 4: Sales Demand Ticket sales will diminish as the ticket price increases. This can be modelled with an equation with a negative slope. Example n = number of tickets sold p = price of a ticket n = - 250p + 27740 Example Sales Demand Model ( n = - 250p + 27740)‏

Task 4: Sales Demand cont. Sales Demand Model based on the following information: Dixie Chickens at Starplex Amphitheater Sales demand based on following data: \$20 ticket price results in sellout of 20,111 tickets \$70 ticket price results in sales of 12,800 tickets Can be expressed as ordered pairs (20, 20111) and (70, 12800)‏ slope= -146.22 y =-146.22+ 23,035.4 This can be rewritten to show ticket demand as: n = - 146.22p + 23035.4