In 1955, Akio Morita, founder of Sony, came to the U.S. to drum-up sales for a new product his company had recently developed. Morita anticipated that Sony would sell approximately 30,000 transistor radios per year to get started. A chain store executive was stunned when Morita spurned his offer to immediately buy 100,000 units. Morita politely sketched a unit costing diagram to explain why 5,000 was too small of an order but 50,000 units was at the same time too big.
a) What was Morita drawing and what did he know about costing that the chain store representative was overlooking? Be sure to describe or chart the shape of Morita's costing sketch in your answer.
b) How is time frame important to your explanation.