(Answered) : Week 4 – Production allocation: How is merchandise allocated to stores? How can retailers use this to save money/inventory?

Week 4 – Production allocation: How is merchandise allocated to stores? How can retailers use this to save money/inventory?

Expert Answer

Answer:-

The merchandise is allocated to stores based on the equivalent optimal quantity methodology.

Through the optimal quantity, the company allocates efficient merchandise to its respective stores. The optimal quantities are either the economic batch quantity (EBQ) or the economic order quantity (EOQ). The EBQ is common in the service sector as EOQ is synonymous to manufacturing. Through the two approaches, the firms place or hold the most desirable or optimal quantity of stock needed to satisfy the demand at

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