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Q2: BB manufactures a range of electronic products. The supplier of component Y has informed BB that it will offer a quantity discount of 1.0

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Q2: BB manufactures a range of electronic products. The supplier of component Y has informed BB that it will offer a quantity discount of 1.0 per cent if BB places an order of 10 000 components or more at any one time. Details of component Y are as follows: Cost per component before discountS2.00 Annual purchases Ordering costs Holding costs 150 000 components $360 per order $3.00 per component per annun . Required: . (i) Calculate the total annual cost of holding and ordering inventory of component Y using the economic order quantity and ignoring the quantity discount. (ii) Calculate whether there is a financial benefit to BB from increasing the order size to 10 000 components in order to quality for the 1.0 per cent quantity discount

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