Happy Pet, Inc., is a large pet store located in Long Beach Mall. Although the store specializes
Question:
Happy Pet, Inc., is a large pet store located in Long Beach Mall. Although the store specializes in dogs, it also sells fish, turtle, and bird supplies. The Everlast Leader, a leather lead for dogs, costs Happy Pet $7 each. There is an annual demand for 6,000 Everlast Leaders. The manager, Stephan Wagner, has determined that the ordering cost is $20 per order and the carrying cost, as a percentage of unit cost, is 15%. Happy Pet is now considering a new supplier of Everlast Leaders. Each lead would cost only $6.65, but, in order to get this discount, Happy Pet would have to buy shipments of 3,000 at a time. Should Happy Pet use the new supplier and take this discount for quantity buying?
Step by Step Answer:
Principles Of Operations Management Sustainability And Supply Chain Management
ISBN: 9780135173930
11th Edition
Authors: Jay Heizer, Barry Render, Chuck Munson