Question Answered step-by-step Charles is the owner of Le Man Florist, located in Tsim Sha Tsui, which opens 25 days a month, selling fresh and dried flowers. It aims to provide a 99.99% service level to its customers. The florist’s bestseller is the tulips from the Netherlands, which is ordered daily to meet regularly demand. Over the past month, the owner noticed that the demand for purple roses has risen and is sold out quickly daily hence he decides to order more and keep extra in its warehouse just in case the demand rises again. As Valentine’s Day is fast approaching, the owner needs to start planning for the number of red roses to order. Meanwhile, the store assistant notified Charles that the supplier in USA has already sent out the blue hydrangeas and it is on its way to Hong Kong using air transport. Finally, as Christmas is only a few days away, Charles asked the store assistant to put up some miniature Christmas trees all around the shop for decoration purposes.Recently, Charles has learnt the Simple Economic Order Quantity (EOQ) model and wishes to apply it to his shop’s replenishment orders. He decides to calculate the order quantity for sunflowers. From the information given to him by his store assistant, the average bi-monthly demand for sunflowers is 196 stalks. One box is able to contain 14 stalks of sunflowers. The value of one box of sunflowers is $280 and its annual carrying cost is 20 per cent. The order cost is $75 while the order cycle time is 5 days. The standard deviation of daily demand is 2.5 boxes. Service Level Z value 99.99% 3.72 99.90% 3.09 99.00% 2.33 95.00% 1.64 85.00% 1.04 75.00% 0.67… Show more (c) What is the Economic Order Quantity (EOQ) of the sunflowers in boxes? (5 marks)(d) What is the Total Annual Cost (TAC) of the sunflowers? (5 marks)(e) What is the Reorder Point (ROP) of the sunflowers in boxes?Engineering & Technology Industrial Engineering Supply Chain Management LGT 3001
