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Henly inc. Purchased 50000 gallons of extra virgin olive oil. Ordering costs are 85.00$ per order, and the carrying cost, as a percentage of inventory
Henly inc. Purchased 50000 gallons of extra virgin olive oil. Ordering costs are 85.00$ per order, and the carrying cost, as a percentage of inventory value is 80%. The purchase price to Henly is 0.50$ pr gallon. Henly's management currently order the EOQ each time an order is placed. No safety stock is carried. The supplier is now offering a quantity discount of 0.03 per gallon if Henly orders 10000 gallons at a time. What is the net benefit in dollars if Henly takes the discount?
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