Business, 20.11.2020 16:30 ariloveshorses

Garden Variety Flower Shop uses 930 clay pots a month. The pots are purchased at $3.90 each. Annual carrying costs per pot are estimated to be 10 percent of cost, and ordering costs are $10 per order. The manager has been using an order size of 2,000 flower pots.

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Answer from: kell22wolf

A.$151

B.38%

Explanation:

A. Calculation for What additional annual cost is the shop incurring by staying with this order size

First step is to calculate EOQ

Using this formula

EOQ = Square root(2*Annual demand*ordering cost/Holding cost per unit per year)

Let plug in the formula

EOQ =Square root (2*12*930*10/.39)

EOQ = 757 pots

Second Step will be to calculate the Annual cost when EOQ is used

Annual cost( EOQ )= (12*930/757)*10 + (757/2)*.39

Annual cost( EOQ )= $295

Third step is to calculate the Annual cost when 2000 pot is ordered

Annual cost ( 2000 pot is ordered) = (12*930/2000)*10 + (2000/2)*.39

Annual cost ( 2000 pot is ordered) = $445.8

Last step is to calculate the Additional annual cost

Additional annual cost = 445.8 - 295.04

Additional annual cost = $150.76

Additional annual cost=$151 (Approximately)

Therefore the Additional annual cost will be $151

B. Calculation for what benefit would using the optimal order quantity yield

About % of the storage space would be needed

= 757/2000

About % of the storage space would be needed

= 37.85% or 38%

Therefore the About % of the storage space would be needed is 38%

Answer from: Quest

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7. customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3

Answer from: Quest

answer utilities; more money you have to pay out ; )

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Garden Variety Flower Shop uses 930 clay pots a month. The pots are purchased at $3.90 each. Annual...