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1. 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?
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Given the following data for a particular inventory item: Usage 500 units/week Ordering $40 per order Carrying Cost $.01 per unit per week Lead Time 3 weeks Price $.50 per unit a.
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