Teasel Dried

You are a seller of dried plants. What is the economic order point for Dried Teasel costing 50 cents per stem with a shipping cost of around 8 dollars per 30 stems.

Assuming a demand of 100 stems per month, an inventory carrying cost of 20% of the product's cost, and an annual ordering cost of $10, the economic order quantity (EOQ) for Dried Teasel can be calculated using the following formula:

EOQ = √((2DS) / (IC))

where:

• D = Demand per month (100 stems)
• S = Shipping cost per unit (8 dollars / 30 stems = 0.27 dollars/stem)
• I = Inventory carrying cost per unit (20% of 50 cents = 0.10 dollars/stem)
• C = Product cost per unit (50 cents = 0.50 dollars/stem)

Plugging in the values:

EOQ = √((2 * 100 * 0.27) / (0.10 * 0.50))
EOQ ≈ 91.66 stems

Since you cannot order a fraction of a stem, round up to the nearest whole number:

EOQ ≈ 92 stems

Therefore, the economic order quantity for Dried Teasel is 92 stems.