The Fifth Quarter Bar buys Old World draft beer by the barrel from a local distributor. The bar has an annual demand of 900 barrels, which it purchases at a price of $205 per barrel. The annual carrying cost is 12% of the price, and the cost per order is $160. The distributor has offered the bar a reduced price of $190 per barrel if it will order a minimum of 300 barrels. Should the bar take the discount?
Answer to relevant QuestionsIf the Retread Tire Company in Problem 2 changes its pricing for recapping a tire from $25 to $31, what effect will the change have on the break-even volume?The bookstore at State University purchases from a vendor sweatshirts emblazoned with the school name and logo. The vendor sells the sweatshirts to the store for $38 apiece. The cost to the bookstore for placing an order is ...Community Hospital orders latex sanitary gloves from a hospital supply firm. The hospital expects to use 40,000 pairs of gloves per year. The cost to order and to have the gloves delivered is $180. The annual carrying cost ...In Problem 41, the manager of the Uptown Bar and Grill has negotiated with the beer distributor for the lead time to receive orders to be a constant 3 days. What effect does this have on the reorder point developed in ...Burlingham Mills produces denim cloth that it sells to jeans manufacturers. It is negotiating a contract with Troy Clothing Company to provide denim cloth on a weekly basis. Burlingham has established its monthly available ...
Post your question