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Garden Variety Flower Shop uses 760 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? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)
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.)
A manufacturer concerned mainly with production efficiencies and reducing unit costs is known as Production oriented.
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The technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated is called the-
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