Question
Red Revival (RR) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions
Red Revival (RR) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Brisbane Bears jerseys. This is a highly popular item. Data for 2014 are:
Expected annual demand for Bears jerseys | 35,000 |
Ordering cost per purchase order | $51.6 |
Carrying cost per year | $6.1 per jersey |
Each jersey costs RR $55 and sells for $110. The $6.1 carrying cost per jersey per year comprises the required return on investment of $0.66 (12%x$55 purchase price) plus $1.1 in relevant insurance, handling and theft-related costs. The purchasing lead time is seven days. RR is open 365 days a year.
Calculate and enter the number of orders that will be placed each year in the answer block below:
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