About the additional annual cost

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Reference no: EM131135993

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? (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.

Reference no: EM131135993

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