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AAA Company is a big supplier that wants to make it difficult for new suppliers to take sales away from its important customer BBB. Currently
AAA Company is a big supplier that wants to make it difficult for new suppliers to take sales away from its important customer BBB. Currently AAA sells BBB 18,000 units yearly at a cost of $85 per unit, and BBB is placing orders of EOQ. AAA wants BBB to increase the size of its next order to 4500 units by offering a price discount. Ordering costs are $3150 per order and holding cost is 30.8% of item value. What is the smallest discount (new discount price), that AAA needs to offer BBB to make it economical to purchase 4500 units next time.
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