Reference no: EM133042561

Question - 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),

Required -

1. What is his current ordering quantity Q?

2. What is his current average inventory level (number of dresses in the store)?

3. How does ordering quantity Q affect his average inventory level?