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Q.5Yasir Company a regional supermarket chain, orders 480,000 cans of frozen orange juice per year from a City distributor. A 24-can case of frozen juice
Q.5Yasir Company a regional supermarket chain, orders 480,000 cans of frozen orange juice per year from a City distributor. A 24-can case of frozen juice delivered to Yasir Company's central warehouse costs Rs 4.80, including freight charges. The company borrows funds at a 10% interest rate to finance its inventories. Yasir Company's purchasing agent has calculated that its costs Rs 15 to place an order for frozen juice and that the annual variable storage expense (electricity, insurance, and handling) is Re. 0.08 for each can of juice. Required: (1) Compute the number of cases of frozen juice that Yasir Company should request in each order. (2) Determine the order-size decision that Yasir Company should make, if the City distributor offers a 10% discount off the delivery price for minimum orders of 72,000 cans
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