Problem 28-20 Safety Stocks and Order Points Saché, Inc., expects to sell 700 of

Question

Problem 28-20 Safety Stocks and Order Points

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.

How many orders does the company place per year? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

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?

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.

Explanation / Answer

No of designers every week                700.00 No of weeks                   52.00 Annual Sales          36,400.00 EOQ                500.00 No of orders(36400/500)                   72.80 Day on which order is made(365/72.80)                     5.01 Order is made on every 5th day Day on Which Suits arrived Monday Day on Which Last order placed(3 days before) Friday Day on which next order will be placed(after5 days) Wednesday

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