Question: Inventory models A videoke bar buys draft beer by the barrel from a local distributor. The bar has an annual demand of 9,000 barrels, which

Inventory models

A videoke bar buys draft beer by the barrel from a local distributor. The bar has an annual demand of 9,000 barrels, which it purchases at a price of P205 per barrel. The annual carrying cost is 12% of the average inventory and the cost per order is P160. The distributor has offered the bar owner a reduced price to P190 per barrel if the owner will order a minimum of 300 barrels per order. Should the bar owner take the offer?

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