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A flower shop uses 800 clay pots a month. The pots are purchased at $2 each. Annual carrying costs are estimated at $0.60 per pot per year and...

A flower shop uses 800 clay pots a month. The pots are purchased at $2 each. Annual carrying costs are estimated at $0.60 per pot per year and ordering costs are $20 per order. The manager has been currently using an order size of 1600 flower pots per order. What additional cost is the shop incurring by using this current order size rather than the economic order quantity. Also other than potential cost savings, what benefit(s) would using the optimal order quantity yield?

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