>> Operation Management
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. Calculate the optimal order size and the corresponding total cost. The manager has been ordering two months of demand (1500 pots) at a time. How much money has he been losing with this practice?