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Company ABC purchases 80,000 boxes of staples every year. Ordering costs are $30 per order, carrying costs are 16% of the inventory value, and the
Company ABC purchases 80,000 boxes of staples every year. Ordering costs are $30 per order, carrying costs are 16% of the inventory value, and the price is $1.20 per box. The company currently orders at the EOQ level to minimize the total inventory costs. The vendor now offers a quantity discount of 1% per box if the company orders 20,000 boxes per time. Should the company accept the quantity discount? Show your calculations to justify your decision
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