Question: An electronics store currently buys clock radios from its supplier in quantities of 1000. They have an annual demand for that model of 10000 radios.
An electronics store currently buys clock radios from its supplier in quantities of 1000. They have an annual demand for that model of 10000 radios. The sales rep for the supplier has offered them 5% discount off of the normal $20 cost if they double the current order size. She also offers 10% if they order 5000 at a time, as it eill lower shipping cost. The store estimates the cost of holding inventory of the radios to be $10 per uear per radio and they think it costs $500 place an order for radios. Given the information you have, what quantity should they order from now on?
A. 1000 per order
B. 2000 per order
C. 5000 per order
D. 10000 per order
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