Question

Saché, Inc., expects to sell 1,120 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 920 suits and a safety stock of 160 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 answer to 2 decimal places, e.g., 32.16.) Orders per year times Assume that it is Wednesday morning before the store opens, and a shipment of suits has just arrived. When will Saché place its next order?

Answer 1

1. Number of suits that are sold by the company per week = 1120

Number of weeks in the year = 52 weeks

Total number of suits to be sold in the year = Number of suits sold per week × Number of weeks

                                                                                =1120*52 = 58,240 suits

Number of orders per year is (i.e Orders per year) =Total suits sold / EOQ

= 58,240 / 920 = 63.304347826 times

= 63.30 times

2. The number of days between orders = 365 / 63.304347826 = 5.7657 days i.e 5.77 days

The last order was placed 3 days ago, so the next order will be placed after 2 more days. Hence the order will be placed after the close of business on Thursday.

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