Question: Kellys Tavern buys Shamrock draft beer by the keg from a local distributor. The bar has an annual demand of 900 kegs, which it purchases

Kelly’s Tavern buys Shamrock draft beer by the keg from a local distributor. The bar has an annual demand of 900 kegs, which it purchases at a price of $60 per keg. The annual carrying cost is $7.20, and the cost per order is $160. The distributor has offered the bar a reduced price of $52 per barrel if it will order a minimum of 300 barrels. Should the bar take the discount?

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