Using optimal order quantity yield

Assignment Help Operation Management

Reference no: EM131791619

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? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

Additional annual cost $

b. Other than cost savings, what benefit would using the optimal order quantity yield? (Round your answer to the nearest whole percent. Omit the "%" sign in your response.)

About % of the storage space would be needed.

What is the answer for B?

Reference no: EM131791619

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