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Raymour and Flanigans, a furniture is store, is deciding what impact lost sales versus backlogging sales would have on their inventory of dining room chairs.
Raymour and Flanigans, a furniture is store, is deciding what impact lost sales versus backlogging sales would have on their inventory of dining room chairs. They order 40 chairs at a time and the average demand is 10 per week. The chairs cost $100 each and the estimated the cost of understocking is $5. Their holding cost is 20%. Compare the CSL of backlog sales versus lost sales. Would backlog or lost sales require the store to carry more inventory
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