Question
A flower shop uses 290 clay pots a month. The pots are purchased for $2 each. Annual holding cost is estimated to be 35 percent
A flower shop uses 290 clay pots a month. The pots are purchased for $2 each. Annual holding cost is estimated to be 35 percent of purchase cost, and ordering cost is $24 per order. The manager has been using an order quantity of 290 flower pots.
a. Calculate the EOQ. (Round the final answer to the nearest whole number.)
EOQ = ?pots
b. Calculate the EOQs total annual inventory control cost. (Round the final answer to 2 decimal places.)
TC = ?$
c. What additional annual inventory control cost is the shop incurring by using the current order quantity? (Round the final answer to 2 decimal places.)
Additional cost = ?$
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