Marisa Williams runs a retail grocery store and purchases items for resale to her customers. She...

50.1K

Verified Solution

Question

General Management

Marisa Williams runs a retail grocery store and purchases itemsfor resale to her customers. She is facing an ordering decisionabout how much of a particular item to purchase at one time.. inorder t take advantage of supplier discounts (if it makes sense todo so).
Demand = 36,000 units per year
order cost = $25 per order
Carrying cost = $0.45 per unit
purchasing price = $0.85
Discount price= $0.82 (if buy a minimun of 6,000 units perorder)
Should she takediscount (show your work)
What other aspectsa bout the purchase decision forthis itemshould she consider?
If this item were highly perishable and had a carrying cost of$0.65/unit, would it still make sense?

Answer & Explanation Solved by verified expert

4.2 Ratings (806 Votes)

D annual demand 36000 S fixed ordering cost 25 C purchase price 085 H carrying cost per item 045 Economic Order Quantity Q 2DSH12 SQRT23600025045 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member