Saché, Inc., expects to sell 700 of its designer suits every week. The store is

Question

Saché, Inc., expects to sell 700 of its designer suits every week. The store is open seven days a week and expects to sell the same number of suits every day. The company has an EOQ of 500 suits and a safety stock of 100 suits. Once an order is placed, it takes three days for Saché to get the suits in. (Enter your answer as directed, but do not round intermediate calculations.) Requirement 1: How many orders does the company place per year? (Round your answer to 2 decimal places (e.g., 32.16).) Orders per year times Requirement 2: Assume that it is Monday morning before the store opens, and a shipment of suits has just arrived. When will Saché place its next order?

Explanation / Answer

1. Number or orders = Annual Demand / EOQ

Number or orders = 700 * 52 / 500 = 72.8 or 73 orders

2. Time between two orders = no. of working days / number of orders

= 365 / 73 = 5 days

For shipment to arrive on Monday order must have been placed on Friday. This means next order should be placed 5 days after friday i.e. on Wednesday

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