Question 20.3: Restocking Costs In Example 20.2 , suppose Thiewes sells a ...
Restocking Costs
In Example 20.2 , suppose Thiewes sells a total of 600 pairs of boots in a year. How many times per year does Thiewes restock? Suppose the restocking cost is $20 per order. What are total restocking costs?
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Thiewes orders 100 items each time. Total sales are 600 items per year, so Thiewes restocks six times per year, or about once every two months. The restocking costs would be 6 orders × $20 per order = $120.
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