Problem 5

What order size would minimize the sum of annual ordering and carrying costs? Computer the total annual cost using your order size from part a. Expect for rounding, are annual ordering and carrying costs always equal at the EQQ? The office manager is currently using an order size of 200 boxes. The partner of the firm expect the office to be managed " in a cost - efficient manner." Would you recommend that the office manager use the optimal order size instead of 200 boxes? Justify your answer. Garden Variety Flower Shop uses 750 clay pots a month. The pots are purchased at $2 each. Annual carrying costs per pot are estimated to be 30 percent of cost, and ordering costs are $ 20 per order. The manager has been using an order size of 1,500 flower pots. What additional annual cost is the shop incurring by staying with this order size? Other than cost savings, what benefit would using the optimal order quantity yield? A produce distributor uses 800 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate Ordering costs are $28. Currently the manager orders once a month. How much could the firm save annually in ordering and carrying costs by using the EOQ? A manager receives a forecast for next year. Demand is projected to be 600 units for the first half of the year and 900 units for the second half. The monthly holding cost is $2 per unit, and it costs estimated $55 to process an order. What order size would minimize the sum of annual ordering and carrying costs? Computer the total annual cost using your order size from part a. Expect for rounding, are annual ordering and carrying costs always equal at the EQQ? The office manager is currently using an order size of 200 boxes. The partner of the firm expect the office to be managed " in a cost - efficient manner." Would you recommend that the office manager use the optimal order size instead of 200 boxes? Justify your answer. Garden Variety Flower Shop uses 750 clay pots a month. The pots are purchased at $2 each. Annual carrying costs per pot are estimated to be 30 percent of cost, and ordering costs are $ 20 per order. The manager has been using an order size of 1,500 flower pots. What additional annual cost is the shop incurring by staying with this order size? Other than cost savings, what benefit would using the optimal order quantity yield? A produce distributor uses 800 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate Ordering costs are $28. Currently the manager orders once a month. How much could the firm save annually in ordering and carrying costs by using the EOQ? A manager receives a forecast for next year. Demand is projected to be 600 units for the first half of the year and 900 units for the second half. The monthly holding cost is $2 per unit, and it costs estimated $55 to process an order