Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Garden Variety Flower Shop uses 1200 clay pots per month. The pots are purchased at $5 each. Annual carrying costs per pot per year are
- Garden Variety Flower Shop uses 1200 clay pots per month. The pots are purchased at $5 each. Annual carrying costs per pot per year are estimated to be 20 percent of the purchase cost, and ordering costs are $35 per order. The manager has been using an order size of 1200 flower pots.
- What is your new EOQ and the annual total cost?
- What is the total annual cost for the old way the manager used to order?
- What is the percentage savings that your new EOQ has over the old method of the manager?
- What is the time between orders (months) for your order size in part (a)?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started