Demand for fasteners at W.W. Grainger is 20,000 boxes per month. The holding cost at Grainger is
Question:
Demand for fasteners at W.W. Grainger is 20,000 boxes per month.
The holding cost at Grainger is 20 percent per year. Each order incurs a fixed cost of $400. The supplier offers an all unit discount pricing scheme with a price of $5 per box for orders under 30,000 and a price of $4.90 for all orders of 30,000 or more. How many boxes should Grainger order per replenishment?
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To solve this exercise we will calculate the cost per box for each category and then calculate the t...View the full answer
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