1- Garden variety flower shop uses 750 clay pots a month. The pots are purchased at $2 each. Annual carrying costs per pot are estimated to be 30 percent of cost, and ordering costs are $20 per order.
The manager has been using an order size of 1,500 flower pots.
a- What additional annual cost is the shop incurring by staying with this order size?
b- Other than cost savings, what benefit would using the optimal order quantity yield?