Dominics supermarket chain sells Nut Flakes, a popular cereal manufactured by the Tastee cereal company. Demand for
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Dominic’s supermarket chain sells Nut Flakes, a popular cereal manufactured by the Tastee cereal company. Demand for Nut Flakes is 1,000 boxes per week. Dominick’s has a holding cost of 25 percent and incurs a fixed trucking cost of $200 for each replenishment order it places with Tastee.
(a) Given that Tastee normally charges $2 per box of Nut Flakes, how much should Dominick’s order in each replenishment lot?
(b) Tastee runs a trade promotion, lowering the price of Nut Flakes to $1.80 for a month. How much should Dominick’s order be, given the short-term price reduction?
Related Book For
Understanding Basic Statistics
ISBN: 978-1111827021
6th edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
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