Jerald a local plant nursery uses 100 clay pots and 900 plastic pots a month. He purchases each clay pot from $40 and each plastic pot from $20 from a local pot producer. Jerald pays $100 per order delivery. Monthly carrying costs per pot estimated to be 20% and 10% for clay and plastic pots respectively.
a) Calculate EOQ for clay and plastic pots separately.
b) Calculate the total cost of ordering and carrying pot in a year for each type of pot.
c) Jerald recently figured out that there is a new ceramic coated thin clay pots from $25 in the market. He estimated the monthly carrying costs per ceramic pot to be 20%. How much Jerald will save if he starts using new ceramic pots for both clay and plastic pots?