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Victor sells a line of upscale evening dresses in his boutique. He charges $425 per dress, and sales average 35 dresses per week. Currently, Victor orders a 15-week supply at a time from the manufacturer. He pays $140 per dress, and it takes three weeks to receive each delivery. Victor estimates his administrative cost of placing each order at $375. He estimates his cost of inventory at 25% of the cost of each dress.
Using Victor's current ordering policy, determine the following:
Victor want to lower his inventory costs:
Compare Victor's original ordering policy with the new one to minimize costs:
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