The owner of the Beachcomber Hair Salon in Galveston, Texas, orders bottles of professional shampoo from a
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Question:
a. If the store can only accommodate a maximum inventory of 20 bottles of shampoo after the expansion, determine the extra inventory costs that it will incur each year compared to its cost-minimizing order quantity.
b. One way to make smaller orders more economical would be to reduce the ordering cost. Determine the ordering cost that would make an order quantity of 20 bottles optimal for the store.
c. Suggest one practical way to reduce the ordering cost to the level determined in Part b.
Related Book For
Managing Supply Chain and Operations An Integrative Approach
ISBN: 978-0132832403
1st edition
Authors: Thomas Foster, Scott E. Sampson, Cynthia Wallin, Scott W Webb
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