Question: Problem 1 2 - 5 ( Algo ) Garden Variety Flower Shop uses 5 7 0 clay pots a month. The pots are purchased at
Problem Algo
Garden Variety Flower Shop uses clay pots a month. The pots are purchased at $ each. Annual carrying costs per pot are
estimated to be percent of cost and ordering costs are $ per order. The manager has been using an order size of flower
pots.
a What additional annual cost is the shop incurring by staying with this order size?
Note: Round your optimal order quantity to the nearest whole number. Round all other intermediate calculations and your final
answer to decimal places.
b Other than cost savings, what benefit would using the optimal order quantity yield relative to the order size of
Note: Use the rounded order quantity from Part a Round your final answer to the nearest whole percent.
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