A company faces an annual demand for 80,000 silk shirts. The holding cost is $1.60 per shirt & year, & the cost of placing one order is $1,000. In which one shirt costs $20. Suppose that our supplier offers a 1% discount if we were to order at least 30,000 shirts. Assuming that the holding costs are 8% of the purchase price, should we take this offer?
A company faces an annual demand for 80,000 silk shirts. The holding cost is $1.60 per shirt & year, & the cost of placing one order is $1,000. In which one shirt costs $20. Suppose that our supplier offers a 1% discount if we were to order at least 30,000 shirts. Assuming that the holding costs are 8% of the purchase price, should we take this offer?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A company faces an annual demand for 80,000 silk shirts. The holding cost is $1.60 per shirt & year, & the cost of placing one order is $1,000.
In which one shirt costs $20. Suppose that our supplier offers a 1% discount if we were to order at least 30,000 shirts. Assuming that the holding costs are 8% of the purchase price, should we take this offer?
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