Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 = ?$

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Pain Management Workbook

Authors: Rachel Zoffness, Mark A. Schumacher

1st Edition

1684036445, 978-1684036448

More Books

Students also viewed these General Management questions

Question

Discuss communication challenges in a global environment.

Answered: 1 week ago