The Big Cheese Pizza Parlor buys lots of pizza boxes. They normally pay $1 per box when
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The Big Cheese Pizza Parlor buys lots of pizza boxes. They normally pay $1 per box when ordering from their supplier. Based on their annual forecast for pizza demand, their demand for boxes is estimated to be 10,000 units for the year. It costs $25 to place an order and their holding cost for boxes is 25% of the cost of a box per year. The supplier tells the Big Cheese Pizza buyer that she can sell the boxes for $0.95 each if they buy a minimum of 5000 at a time. Should they take the discount, and what is the total cost?
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Related Book For
Operations Management A Supply Chain Process Approach
ISBN: 978-1483383064
1st edition
Authors: Joel D. Wisner
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