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A manufacturer produces bicycles and works 4 8 , 2 shifts per day weeks out of the year. The chains are purchased from an outside
A manufacturer produces bicycles and works shifts per day weeks out of the year. The chains are purchased from an outside supplier.
Four hundred chains per week are required.
The bicycle chains cost $ each.
The total cost associated with an order is $ while the storage cost is of the price of each chain.
In an attempt to reduce its costs, the chain manufacturer has offered to discount the cost of chains by on orders of or more.
Should the discount be taken? Explain why or why not.
A manufacturer of aircraft parts purchases special bolts for the wings of one type of aircraft.
The bolts cost $ each.
A discount per order is offered on orders of or more.
The total number of bolts needed each year is
The order cost for bolts is $
The annual inventory cost for bolts is $
Calculate and decide if the discount should be taken. Explain why or why not.
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