Illustrate what additional cost is shop incurring

Assignment Help Operation Management

Reference no: EM1374775

Q. A flower shop uses 800 clay pots a month. Pots are purchased at $2 each. Annual carrying costs are approximate d at $0.60 per pot per year and ordering costs are $20 per order. Manager has been currently using an order size of 1600 flower pots per order.

• Illustrate what additional cost is shop incurring by using this current order size rather than economic order quantity?

• Or than potential cost savings, illustrate what benefit(s) would using optimal order quantity yield?

• Illustrate what is number of orders per year if manager uses current order quantity of 1600?

• Illustrate what is number of orders per year if manager uses Economic Order Quantity?

• Illustrate what is maximum number of flower pots that are held in inventory in a given ordering cycle?

• Explain how long will each order last (in months) if manager uses Economic Order Quantity?

• Assume that lead time for pots is 1 month. Illustrate what is Reorder Point? Verbally, interpret meaning of this Reorder Point.

Reference no: EM1374775

Questions Cloud

Discuss the direction of change : Name some areas of business in the United States where the prevailing market structures have changed dramatically in last 20-years and discuss the direction of change

Wto member state as well as a party to nafta : State C is a WTO member state as well as a party to NAFTA. It has made no exact agreement under either GATS or NAFTA as to its road transport sector

Machine would reduce cash operating costs : The machine would reduce cash operating costs by $114,000 per year. The machine could have no salvage value.

Executive staff has been reading about outsourcing costs : A multinational organization in China has knowledgeable dramatic growth in the past two years. Recently the executive staff has been reading about outsourcing costs as well they want to renegotiate their contract with Outsourcing Company

Illustrate what additional cost is shop incurring : Annual carrying costs are approximate d at $0.60 per pot per year and ordering costs are $20 per order. Illustrate what additional cost is shop incurring by using this current order size rather than economic order quantity.

Evaluate how much of the factory overhead cost : Find what total overhead costs would you expect the company to incur at an operating level of 66,330 machine-hours?

Analyzing the current market conditions : Examining the current market situations of "Starbucks" competition can take many forms. value competition includes collusion, price leadership, loss leaders, price discrimination.

Explain how have its weaknesses exacerbated threats : explain how have its weaknesses exacerbated threats and cause m to fail to take pros of opportunities. Has Google realized mission and vision through dealing with exogenous threats and external opportunities.

Read the sternberg as well as sternberg article located : Read the Sternberg as well as Sternberg article located in Course Materials in the Resources link and utilize the APA textbook readings to deliberate the importance of adhering

User Account

All Pages