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Social Science Clinic => Business => Finance => Topic started by: torybrooks on May 1, 2019

Title: A flower shop is trying to determine the optimal order quantity of the wicker baskets that it places ...
Post by: torybrooks on May 1, 2019
A flower shop is trying to determine the optimal order quantity of the wicker baskets that it places many of its arrangements in. The store thinks it will sell 2000 of these baskets over the next year. The baskets cost the shop $2.00 each. The carrying cost of the baskets is $0.15 each per year. It costs the shop $8.00 to order.
a.What is the economic order quantity?
b.What is the total cost for ordering the baskets once a year? Four times a year?
Title: A flower shop is trying to determine the optimal order quantity of the wicker baskets that it places ...
Post by: Rilsmarie951 on May 1, 2019
a.Q* =  =  = 462 units
b.total cost:  (Q/2)C + (S/Q)O
ordering once: (2000/2) (.15) + (2000/2000) 8 = 150 + 8 = $158
ordering 4 times: (500/2) (.15) + (2000/500) 8 = 37.50 + 32 = $69.50
Title: A flower shop is trying to determine the optimal order quantity of the wicker baskets that it places ...
Post by: torybrooks on May 1, 2019
Thank you!
Title: A flower shop is trying to determine the optimal order quantity of the wicker baskets that it places ...
Post by: Rilsmarie951 on May 1, 2019
Always glad to help...
Title: Re: A flower shop is trying to determine the optimal order quantity of the wicker baskets that it pl
Post by: Liane Kathriel Sumido on Nov 3, 2021
Thank you!