Louisville Slugger The Louisville Slugger baseball bat began over 120 years ago in the talented hands of 17-year-old John A. “Bud” Hillerich. Bud, whose father owned a woodworking shop, left work one afternoon to watch Louisville’s major league team, the Louisville Eclipse, and his favorite player, Pete Browning. During the game, Browning, who was struggling through a long hitting slump, broke his bat. Following the game, Bud met Browning and invited him to his father’s shop to make him a new bat. With Browning’s assistance, Bud handcrafted a new bat for Browning from a single piece of wood. Browning got three hits with it the next day and the “Louisville Slugger” was born. Since that time, baseball legends like Babe Ruth and …show more content…
Louisville Slugger can produce the Exogrid for $145 each in variable costs and estimated fixed costs of $3 million per year. According to Louisville Slugger’s marketing study, which cost the company $225,000, the company’s estimated sales volume in Exogrid bats for the next six years may be seen by the chart below: |YEAR |SALES VOLUME | |Year 1 |75,000 | |Year 2 |125,000 | |Year 3 |50,000 | |Year 4 |90,000 | |Year 5 |80,000 | |Year 6 |65,000 | Louisville Slugger expects to sell the Exogrid for $350 per bat for the first three years and a discounted $300 per bat for Years 4, 5, and 6. The cost of the equipment to manufacture the Exogrid is $25 million and will be depreciated on a seven-year MACRS schedule. The value of the equipment used to manufacture the Exogrid in six years will be $3.5 million. Louisville Slugger has a 40 percent corporate tax rate and a 12 percent required return. You are employed in Louisville Slugger’s finance department and are head of the capital budgeting team. The CEO of Louisville Slugger has asked you to prepare a brief report on the profitability of producing the Exogrid. In
Since the inception of the first Major League Baseball (MLB) game, played on May 4, 1871, bats made of wood have been the tradition in baseball. The creation of metal bats occurred in the 1920s, but not actually used in play until 1970 when they were introduced into Little League youth baseball. Even though all levels of players from children to professionals seemed to prefer the new metal bats, MLB prohibited their use. Safety, skill level of the players, cost, level of entertainment provided, and tradition are all arguments used in the controversy between whether Major League Baseball should allow metal bats or continue using wooden ones.
Flexibility – Relatively inflexible operations, due to high cost ($20 million) involved in changing the Sportster production lines to produce the Softail and Tourer lines.
The last alternative for estimating fixed expenses brings the total to $4,064,000.00, which will generate a small Net Profit of $1,085,320.00. Although expanding Strike Roach Ender to 19 cities can be profitable, the potential losses Zoecon could take from an effective advertising and promotion strategy for this venture far exceed the potential rewards. The $4,064,000.00 would not be sufficient enough advertising to gain a significant market share in all 19 cities over a substantial amount of time. The general “rule of thumb” approach is more accurately what would be spent for the new Strike Roach Ender product, in which case a major loss would be taken, making this venture not financially feasible.
While J.F. Hillerich’s company was growing, Bud worked for him. One afternoon, Bud, who was seventeen, snuck away from work to see his favorite baseball player play on the Louisville Eclipse (“History”). The Louisville Eclipse was a baseball team in the late 1880’s in a two year old American Association. The player was the team’s star Pete Browning. Browning known as “The Old Gladiator” was in a hitting slump (Oldham). A hitting slump is when a baseball player can’t seem to get on base with a hit many times. Baseball players at that time used either a flat bat like a cricket stick or a round bat, but the bat was oddly shaped or weighted with curves. Both the bats had so many handle styles to them. The regulations were very little at the time. The bat had to be less than forty two inches long and less than two and a half inches thick. On the day that Bud came to see him play, Browning broke his bat. Thus, Bud went over to Browning and convinced him to come with him to his Dad’s shop to make a new bat (Oldham). They grabbed a slab of wood to make the bat (Cantu). The wood was from a White Ash tree. They began handcrafting the bat from the wood with Bud’s carpentry skills and Browning’s knowledge on a good baseball bat (Oldham). They used a wood lathe, turning chisels, and other tools (Cantu). Bud would tweak the bat, then Browning wood swing it. They kept doing this till Browning said it was just right. The bat was named the “Falls City Slugger”. The name, “Falls City Slugger”, came from the stretch of rapids in the Ohio River (“Timeline”). The next day Browning got three hits on three at bats with the bat
Baseball bats aren’t the only things that are changing; in fact it is the aluminum bats that are changing the game. If you asked players who only played with wooden bats, like the legendary Babe Ruth, Mickey Mantle, or even Willie Keeler they would all say that these aluminum bats are taking away from the real game of baseball. These Hall of Fame players aren’t the only ones thinking that it takes away from the game, Bill Thurston, Amherst College’s baseball coach said “All you have to do is talk to pro scout,…They think the college game is ridiculous” (Hruby 42). They think that it is ridiculous because the bats that collegiate players use are helping turn baseball scores into football like scores. A perfect example of this is the 1998 season “During the
widgets is $6.22 and she has been selling them for $9.18. Doing business with this
If Zoëcon decides to launch Strike ROACH ENDER in all 19 cities, it will cost an estimated $7,020,500 ($5,542,500 less 4 initial cities)3. If these cities yield the same profit as the original four in the first 6 months, Zoëcon will have to absorb $5,718,145 in losses4. The low purchase rate could be due to the nature of the product taking 120 days to effectively reduce roach population, and 6 months of test marketing did not reflect accurate consumer buying trends for the product. It may also be attributed to the premium pricing, which were 50-75% higher than competitors. I suggest an additional year of test marketing in the first four cities before a full launch into the consumer market is considered.
A major topic that will come up when people start to talk about college baseball and the bats they use. They have went back and forth debating on whether or not the NCAA should switch to wood bats. There are many reasons why people think they should switch to wood bats. But there are still people who think they should stay using what they use now. Although metal bats will keep the game interesting, some reasons why people think they should switch are that most MLB draft picks come from college and they use wood bats in the MLB. The next reason is hitting with a
the wooden bats sold by Hillerich and Bradsby, the parent company of Louisville Slugger, are
f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.5% of the extermination services revenue of $57,760 for 2011. No warranty expense has been recorded for 2011. All costs of servicing warranties in 2011 were properly debited to the Estimated Warranty Liability account.
For over one hundred years, Americans young and old have enjoyed the sport of baseball. Some are actively and some leisurely. No matter which role the person has, he or she enjoys America’s favorite pastime, baseball, but is it originally an American sport? Over the many years that the sport has existed, there has been a variety of theories. The origin of baseball is unclear because some believe it began in England, others claim Abner Doubleday originated the sport, and a third faction claims it evolved in New York.
(State, © 2000–2014) The bat over time has evolved from wood to aluminum. The first baseball bat came in all shapes and sizes. Kids experimented by making their own bats and testing them in games to see how they would perform. In 1859, a bat could be no bigger than 2.5 diameters and in 1869;
The main difference between investing in the Zinser machine and maintaining the status quo is an initial investment of $8.25 million and the receipt of $608,000 in after-tax sales proceeds from selling the existing machine. Additionally, there is an initial $50,000 ($32,000 after-tax) cost for training employees, but this cost is only incurred once (see exhibit 3). In their first year using the Zinser machine there will be a 5% decrease in sales volume, but selling price will increase 10%. Material costs per pound will be the same as the status quo, but conversion costs will decrease to $0.4077 per pound per year due to lower power, maintenance and return costs. Days of inventory held will also drop to about 20 days. All other assumptions are the same as the status quo. In this scenario, the NPV of the Hunter Plant is about $15.87million if Aurora invests in the new Zisner machine (see exhibit 3).
I suggest pricing the BAM so it will have similar profit margins compared to Loctite’s other pieces of equipment, which is about 25% when selling to distributors and 33% when selling to end users (excluding selling expenses). This means that the aluminum BAM would be priced at $165 for distributors and $185 for end users (costs from p. 5).