Italica Shoes is a local retail shoe store located on the north side of Centerville. Annual demand for a popular sandal is 500 pairs, and Khush Haal, the owner of Italica Shoes, has been in the habit of ordering 100 pairs at a time. Khush estimates that the ordering cost is $10 per order. The cost of the sandal is $5 per pair. For Khush’s ordering policy to be correct, what would the carrying cost as a percentage of the unit cost have to be? If the carrying cost were over 10% of the cost, what would the optimal order quantity be?
Italica Shoes is a local retail shoe store located on the north side of Centerville. Annual… 1 answer below »
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