Compute the total cost of ordering and carrying clay pots

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Reference no: EM13108206

Garden Variety Flower Shop uses 1000 clay pots a month. The pots are purchased at $3 each. Annual carrying costs per pot are estimated to be 25% of cost, and ordering costs are $25 per order.
a. Determine the economic order quantity.
b. Compute the total cost of ordering and carrying clay pots.
c. If the manager has been using an order size of 2,000 pots, how much can be saved per year by improving the inventory policy?

Reference no: EM13108206

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