Ann Kyser, a teacher at Hewitt Middle School, is in charge of ordering the T-shirts to be sold for the school’s annual fund-raising project. The T-shirts are printed with a special Hewitt School logo. In some years, the supply of T-shirts has been insufficient to satisfy the number of sales orders. In other years, T-shirts have been left over. Excess T-shirts are normally donated to some charitable organization. T-shirts cost the school $12 each and are normally sold for $18 each. Ms. Kyser has decided to order 810 shirts.
(a-1) If the school receives actual sales orders for 735 shirts, what amount of profit will the school earn?
(a-2) What is the cost of waste due to excess inventory?
(b-1) If the school receives actual sales orders for 835 shirts, what amount of profit will the school earn?
(b-2) What amount of opportunity cost will the school incur?