Question: IM . 8 3 A distribution center for a sporting goods retailer places orders with manufacturers for a variety of items. Among these is a

IM.83 A distribution center for a sporting goods retailer places orders with manufacturers for a variety of items. Among these is a popular standard skateboard, targeted to first-time skate boarders. The regular price is $50, however, the manufacturer of this skateboard offers quantity discounts per the following discount schedule:
Option Plan Quantity Discount
A 1-1,0990%
B 1,100-2,6990.75%
C 2,700+2.25%
The retailer pays $90 each time it places an order with the manufacturer. Holding costs are negligible (none) but they do earn 14% annual interest on all cash balances (meaning there will be an financial opportunity cost when they put cash into inventory). Annual demand is expected to be 13,250 units.
Based on this information, sort each option plan from left to right by dragging the MOST preferred option plan to the left, and the LEAST preferred option plan to the right:
Option Plan B
Option Plan C
Option Plan A
For the MOST preferred option in the previous question, what will be the adjusted order quantity? (Display your answer to the nearest whole number.)
What will be the annual holding cost for the MOST preferred option? (Display your answer to the nearest whole number.)
What will be the total annual inventory cost for the MOST preferred option? (Display your answer to the nearest whole number.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!