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PK Village purchases a privately labeled break fluid from a contractor in Indonesia. Annual demand for this product is estimated in five thousand cases per
PK Village purchases a privately labeled break fluid from a contractor in Indonesia. Annual demand for this product is estimated in five thousand cases per year. The cost of processing orders at PK Village is estimated to be $30 per transaction, Annual inventory holding costs, including ownership, storage, security etc. are estimated at 17% of the goods value (purchase price). The price negotiated by PK Village is $5.00 per case. The supplier has offered a $0.15 discount per case should PK Village agrees to buy lots of one thousand units or more. A $0.20 discount was also offered if the lot size is two thousand units of greater. Do you recommend PK Village to accept the discount? What should be the order size? Include the Excel file supporting your recommendation
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