Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Max's Floral Shoppes is a three store retailer of fresh Hawaiian inspired floral arrangements serving the greater Santa Monica area. Max's has a central refrigerated

Max's Floral Shoppes is a three store retailer of fresh "Hawaiian" inspired floral arrangements serving the greater Santa Monica area. Max's has a central refrigerated warehouse where he stores exotic flowers shipped directly to him (by air) from his supplier in Maui Hawaii. The lead-time from order to receipt is 2 weeks. Max's order costs are $150 per order and his holding cost are 10% of the cost of a stem. Note that a "stem" is a single flower in an arrangement. Stems are ordered as individual units, but the order quantity needs to be a multiple of 6 -- each arrangement created by Max has 6 stems and the average cost per stem is $4. The grouping only occurs when the arrangements are created. Max then sells each arrangement for $65. Max's annual demand follows a normal distribution with a mean of 11,025 arrangements and a standard deviation of 550 arrangements. To maintain customer goodwill Max's has set a high service level objective of 98% in stock. Consider a year to have 52 weeks or 365 days.

what should be the EOQ for Hawaiian Exotic Flowers. Remember that the EOQ must be stated in a multiple of 6.

The answer is 7044

How to calculate EOQ?

PLEASE DON'T SEND ME THE WRONG ANSWER, I USE EOQ equation, but not get 7044.

I only correct answer is 7044 , If not, please do not answer this question again, thank you!

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

Logistics And Supply Chains In Emerging Markets

Authors: John Manners Bell, Thomas Cullen, Cathy Roberson

1st Edition

0749472405, 978-0749472405

More Books

Students also viewed these General Management questions