Saché, Inc., expects to sell 1,260 of its designer suits every week. The store i
ID: 2751205 • Letter: S
Question
Saché, Inc., expects to sell 1,260 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 1,060 suits and a safety stock of 180 suits. Once an order is placed, it takes three days for Saché to get the suits in.
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? After the close of business on Firday? After the close of business on Monday? After the close of business on Wednesday? or immmediatley?
Saché, Inc., expects to sell 1,260 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 1,060 suits and a safety stock of 180 suits. Once an order is placed, it takes three days for Saché to get the suits in.
Explanation / Answer
Number of order per year = Annual Demand / EOQ = (1,260 * 52) / 1,060 = 61.8 = 62 times
Number of Days between order = No. of working days per year / number of orders = 365 / 62 = 5.88 = 6 days
Lead Time = 3 days
Sache will place its next order = 6 - 3 = 3 days = Thursday
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