Mini-Marathon 2017: An Application of Newsvendor Model

Mr. Pulkit Mathur, the coordinator of Mini-Marathon 2017, was preparing a budget for the event that was scheduled just 1 month down the line. He was yet to take approval of the budget from the higher authority. However, Mr. Mathur was very much confused about the variable expenses, as there was still no clarity regarding the final number of registrations. The variable expenses included spending on t-shirts, water bottles, certificates, chest cards, and refreshments. All these expenditures were directly proportional to the number of participants in the event. In the previous marathons, the organizing team had incurred a huge loss because of the overestimation and underestimation of the registrations. For solving the problem, Mr. Mathur collected the information from all vertical heads and approached Prof. Gaurav Gangwar to get an estimation of the optimal number of registrations for which the variable expenses will be minimum. This case highlights a fascinating problem of running races from the organizer's perspective. It also shows that the problem can be easily handled with the help of operations management techniques.