Garden Variety Flower Shop uses 670clay pots a month. The pots arepurchased at $2.40 each. Annual carryingcosts per pot are estimated to be 10percent of cost, and ordering costs are$10 per order. The manager has beenusing an order size of 2,000 flower pots.a.What additional annual cost is the shopincurring by staying with this order size?(Round your optimal order quantity tothe nearest whole number. Round allother intermediate calculations and yourfinal answer to 2 decimal places.)Additional annual costb.Other than cost savings, what benefitwould using the optimal order quantityyield (relative to the order size of 2,000)?(Use the rounded order quantity fromPart a. Round your final answer to thenearest whole percent.)About%of the stora

Given data Monthly demand = 670 units Annual demand (D) =12×670=8040 units Per unit cost = $2.40…

Answered: Garden Variety Flower Shop uses 670…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A produce distributor uses 790 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 39 percent of the purchase price per crate. Ordering costs are $31. Currently the manager orders once a month. How much could the firm save annually in ordering and carrying costs by using the EOQ? (Round intermediate calculations and final answer to 2 decimal places.) Savings per year
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