Lac Leman Festival (A) Harvard Case Solution & Analysis

Introduction:

This case is mainly dealing with the company which arranges festivals with the brand name Lac Leman Festival de la musique who is directed by Carla Monte who is the active director of the company.She is very much creative and outgoing person who likes to get the best results from those festivals. Currently, she is planning for the two day festival which will be held on Friday and Saturday. So, she needs to forecast about the sale of tickets entries as well as about a new innovative idea of recording the concert or performance of Friday and sell it on before Saturday’s show for the maximization of its returns from tickets as well as from the sale of recorded DVDs.

As far as case A is concerned, Director has made contracts with the performers to let her record their show and for this contractual arrangement she has agreed to pay them around CHF 1.02 Swiss France as royalty fee for per DVD sold and she can only sell the DVDs till Saturday’s show whereas, if any DVD is left unsold, it will be discarded as the company won’t be able to sell it later on. This is the reason for forecasting with great sense of judgment and analytical skills for forecasting and for this purpose, director has asked its secretary Ms. Myko Fyno to perform the preliminary research analysis through collecting the historical data and implementing its academic background and knowledge for analyzing the whole scenario.

Costing details of the Concert and DVD:

The concert is to be held on Friday and Saturday which will cost around CHF 30 per ticket for each day and for forecasting the entries, Secretary has collected the data for last 15 years which has provided the complete details of the people attended the concert on Saturday and for the purpose of simplicity. Mean average has been calculated for the last Fifteen years on Saturdayand it has been determined that how much deviation has been occurred between these years by calculating the standard deviation. This has been done because company has to forecast the people who will attend the concert on Saturday this year as well so that they may forecast the demand of the DVDs.

Costing of the DVDs consists of some fixed costs and some of the variables costs. For this purpose, company needs to be proactive as company has to forecast the demand by mitigating its loss of unsold DVDs produced which will be complete loss for the company which is irrecoverable. Fixed cost includes the non-refundable cost of recording the performance of Friday’s show live amounting to CHF 11,740 and this will require the company to make advance payment for this recording regardless of the DVDs sold. Moreover, fixed cost also includes Editing cost of converting videos into master DVD for selling purpose which consists of around CHF 3000 as well as the setup charges of around CHF 1250 which forms a fixed cost amounting to CHF 15,990 which needs to distributed to the DVDs produced........................

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