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please answer 14 14. Margo's Marshmallow Shoppe purchases 36,000 bags of sugar each year. They pay $20 to place each order and have an annual
please answer 14
14. Margo's Marshmallow Shoppe purchases 36,000 bags of sugar each year. They pay $20 to place each order and have an annual carrying cost of 20% of the purchase price per bag. Each bag costs $2 and management likes to keep 500 bags for safety stock. The sugar vendor now offers a quantity discount of $0.05 per bag when Margo's orders 10,000 bags. a. Determine the EOQ b. Calculate the Total Inventory Cost at EOQ with safety stock. c. Determine the before tax benefit or loss of accepting the quantity discount. (hint: find TIC with new order quantity to take the discount; compare the added cost to the savings from the discount)
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