Question: ( Quantity Discount Model ) Keith Shoe Stores carries a basic black dress shoe that sells at a constant rate of 5 0 0 pairs

(Quantity Discount Model) Keith Shoe Stores carries a basic black dress shoe that sells at a constant rate of 500 pairs of shoes every three months. Keith's current buying policy is to order 500 pairs each time an order is placed. It costs Keith $30 to place an order. The annual holding cost rate is 20%. With the order quantity of 500 pairs, Keith obtains the shoes at the lowest possible cost of $28.00 per pair. Other quantity discounts ordered by the manufacturer are described as follows:
Order Quantity Price per pair
0-99 $36
100-199 $32
200-299 $30
300 or more $28 what is the savings of Keith's shoes when using the quantity discount model as opposed to their current pricing structure (500 pairs)2. What is the average flow time using the basic setup (assuming 250 working days in a year)

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