EBK OPERATIONS MANAGEMENT
12th Edition
ISBN: 8220100283963
Author: Stevenson
Publisher: YUZU
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Chapter 13, Problem 5P
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.
a. What additional annual cost is the shop incurring by staying with this order size?
b. Other that cost savings, what benefit would using the optimal order quantity yield?
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Chapter 13 Solutions
EBK OPERATIONS MANAGEMENT
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