b) DOS computers is one of the known computer hardware store situated in Hafeez Centre, Lahore. It imports heat sink systems at a fixed price of Rs. 900/- per unit from the sole distributer. On January 1st 2020, the store was offered 20% discount on orders of 400 or more units. Provided further that the estimated sales for the year are 800 units, the cost incurred per order is Rs. 900 and the average holding cost per unit per annum is estimated to be Rs.120 per unit. The full price is likely to remain Rs.900 during the year. Please ignore opening and closing inventories, safety stock etc.

You are required to take a decision whether to obtain a quantity discount or not. Please comment why or why not?

subject name :Production and Operational management