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Victor sells a line of upscale evening dresses in his boutique. He charges $300 per dress, and sells 30 dresses per week. Currently, Victor orders
Victor sells a line of upscale evening dresses in his boutique. He charges $300 per dress, and sells 30 dresses per week. Currently, Victor orders a 10-week supply at one time from the manufacturer.He pays $150 per dress, and it takes 2 weeks to receive each delivery. Victor estimates his administrative cost of placing each order at $225. Assuming Victor's annual inventory holding costs are 20% (an item that cost $10 to purchase would cost $2 to hold in inventory for one year),
- what is his current ordering quantity Q?
- what is his current average inventory level (number of dresses in the store)?
- how does ordering quantity Q affect his average inventory level?
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