Question

We are ordering T-shirts for the spring party and are selling them twice what we paid for them. We expect to sell 100 shirts and the standard deviation associated with our forecast is 10 shirts. How many shirts should we order?

Short answer

Answer

100 shirts.

Step-by-step solution

Standard deviation

Standard deviation lets you know how fanned out the information is. It is a proportion of how far each noticed worth is from the mean.

A single period inventory model

As it is one-time order, 100 shirts should be ordered in the situation mentioned. In the case of a one-time product purchase, asingle-period inventory model is the most appropriate model. Additionally, ordering things in bulk gives the company advantage of economies of scale, resulting in a better deal for consumers.