Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Garden Variety Flower Shop uses 730 clay pots a month. The pots are purchased at $2.10 each. Annual carrying costs per pot are estimated to

Garden Variety Flower Shop uses 730 clay pots a month. The pots are purchased at $2.10 each. Annual carrying costs per pot are estimated to be 40 percent of cost, and ordering costs are $25 per order. The manager has been using an order size of 1,250 flower pots.

a.What additional annual cost is the shop incurring by staying with this order size? (Round your optimal order quantity to the nearest whole number. Round all other intermediate calculations and your final answer to 2 decimal places.)

b.Other than cost savings, what benefit would using the optimal order quantity yield (relative to the order size of 1,250)? (Use the rounded order quantity from Part a. Round your final answer to the nearest whole percent.)

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

Mindfulness For Anger Management

Authors: Stephen Dansiger

1st Edition

1641521678, 978-1641521673

More Books

Students also viewed these General Management questions

Question

5 What are the ongoing challenges for HRM?

Answered: 1 week ago

Question

4 What typifies the first and second waves of HRM?

Answered: 1 week ago