A supplier has come to you and offered the following deal. If you buy 29 or fewer

Question:

A supplier has come to you and offered the following deal. If you buy 29 or fewer cases of cleaning solution, the cost will be $25 for each case. If you buy 30 or more cases, the cost will be $20 per case. Assume your cost of carrying inventory is 15 per cent a year, it costs $20 for you to order the material, and you use 50 cases per year.
a. How many cases should you order?
b. Would you negotiate with this supplier for a further discount? Explain the quantities and prices that you would negotiate for and why those quantities and prices are selected.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Operations Management in the Supply Chain Decisions and Cases

ISBN: 978-0073525242

6th edition

Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein

Question Posted: