Question

What is the optimal order quantity for each brand of wedding gowns that Sandy should stock, considering the sales patterns, lead time, and inventory costs, with the following information:

The annual demand for Brand A is 300 gowns, Brand B is 500 gowns, and Brand C is 200 gowns.
Lead time for Brand A is 10 days, Brand B is 12 days, and Brand C is 8 days.
The annual holding cost per gown is $5.
a) Brand A: 150 gowns, Brand B: 250 gowns, Brand C: 100 gowns
b) Brand A: 200 gowns, Brand B: 300 gowns, Brand C: 150 gowns
c) Brand A: 100 gowns, Brand B: 150 gowns, Brand C: 50 gowns
d) Brand A: 120 gowns, Brand B: 180 gowns, Brand C: 80 gowns

Answer 1

The question seeks the optimal order quantity for three brands of wedding gowns, but the decision cannot be accurately made with the given information. Additional data or clarification is needed as the provided examples do not correlate with the question.

Step-by-step explanation:

To determine the optimal order quantity for each brand of wedding gowns that Sandy should stock, we need to consider sales patterns, lead time, and inventory costs. This situation typically calls for the application of an inventory model such as the Economic Order Quantity (EOQ) model, however, the given information and options provided do not adhere to the EOQ formula specifics.

Instead, this seems like a multiple-choice question based on possibly unseen data or information mentioned in prior context. Without the complete costing factors, such as order costs and an EOQ calculation directive, one can only recommend an answer based on best practices in inventory management which often suggest stocking at levels to cover lead time demand and provide some safety stock.

Considering the given options, we would need additional information to make an accurate choice. There might be a missing link between the provided information (Table 3.7 Rent Control and Figure 7.9 Economies of Scale) and the question posed about optimal order quantity, as there's no clear connection given to these examples. Hence, without confidence in the correctness of the answer, it is advised to seek additional data or clarification.