Each year, Florida's Best Salad Dressing, Inc. (FBSD) purchases 50,000 gallons of extra virgin olive oil. Ordering costs are $90.00 per order, and the carrying cost, as a percentage of inventory value is 80 percent. The purchase price to FBSD is $0.50 per gallon. FBSD’s management currently orders the EOQ each time an order is placed. No safety stock is carried. The supplier is now offering a quantity discount of $0.03 per gallon if FBSD orders 10,000 gallons at a time. What is the net benefit in dollars if FBSD takes the discount? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

Answer rating: 100% (QA)

To calculate the net benefit of taking the quantity discount offered by the supplier we need to comp... View the full answer