Question

Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization's logo. Because of the uncertainty in the timing of the sales and to avoid stock outages, Dawes tries to maintain an inventory of shirts equal to two-month's of sales. The shirts cost $4.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 15,400 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months:

July 6,820
August 9,790
September 7,260
October 7,810
November 5,280
December 3,960

Answer 1

The question involves inventory management and sales forecasting of Dawes Designs, which customizes T-shirts for organizations. The company is working to maintain an inventory that matches two months of sales and faces a scenario of calculating necessary order quantities or conducting cash flow analysis to ensure smooth operations based on projected sales and a T-shirt cost of $4.50 each.

Step-by-step explanation:

The question pertains to the inventory management and sales forecasting of a company named Dawes Designs that customizes T-shirts for different organizations. Dawes Designs strives to maintain an inventory equal to two months of sales to avoid stock outages, despite the uncertainty of sales timing. The cost of each T-shirt is $4.50, and the payment for the shirts is made in cash. The company, on June 30, expects to have 15,400 shirts in stock and has sales estimates for the next six months based on contracts and historical data.

Based on the provided information, an exercise that could be related to this scenario might involve calculating the number of shirts Dawes Designs needs to order each month to maintain the desired inventory levels based on projected sales. It could also include budget planning or cash flow analysis considering the cost per T-shirt, total sales, and inventory management strategies.

To give a practical example similar to the scenarios presented, consider Coolshirts, a hypothetical T-shirt company. If Coolshirts sells 10 t-shirts at a price of $9 each, the company's revenue from this sale would be $90. This example showcases a micro-level transaction and how a T-shirt company generates income from individual sales.

Answer 2

The question involves calculating the T-shirt inventory needed for Dawes Designs to cover two months of sales using provided sales estimates, underscoring the importance of effective inventory management and cash flow planning.

Step-by-step explanation:

The question concerns inventory management and sales forecasting for a company named Dawes Designs that specializes in customizing T-shirts. The scenario involves calculating the number of T-shirts Dawes Designs needs to procure in order to maintain an inventory that covers two months' worth of sales, taking into account sales estimates for the upcoming six months.

By analyzing the given sales estimates, Dawes Designs can plan its inventory purchases, which are crucial for avoiding stock outages and ensuring continuous operations, despite the uncertainty in timing of shirt sales. As the shirts cost $4.50 each and are purchased with cash, inventory planning also has a significant impact on the company's cash flow management.