Annual requirement of a particular item of inventory is 10,000 units. Inventory carrying cost per unit per
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Annual requirement of a particular item of inventory is 10,000 units. Inventory carrying cost per unit per year is 20% and ordering cost is Rs. 40 per order. The price quoted by the supplier is Rs. 4/unit. However, the supplier is ready to give a discount of 5% for orders of 1,500 units or more. Is it worthwhile to avail of the discount offer?
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Discount offer When order size is 1500 units the No of order 6 ...View the full answer
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