Question
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
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