A Flower Shop Is Trying to Determine the Optimal Order

question 41

Essay

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 costs 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?

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Definitions:

Cashier Check

A check drawn by a bank on its own funds and signed by a cashier, considered more reliable than a personal check because the bank guarantees its payment.

Commission Salesman

An individual who earns income based on the percentage of sales they generate.

Bargaining Position

The relative power of a party during negotiations that can influence the terms of the agreement.

Model Year Cars

Refers to the specific year's version of a car model, typically signifying technological updates or design changes.