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Sarahs Organic Soap Company needs to purchase organic Palm oil to make her soaps. She needs 1,000 kgs of Palm oil per day on average.
Sarahs Organic Soap Company needs to purchase organic Palm oil to make her soaps. She needs 1,000 kgs of Palm oil per day on average. The supplier charges a $60 delivery fee per order (which is independent of the order size) and $4.75 per kg. Sarahs annual holding cost is 25%. Assume 52 weeks per year and 5 days per week.
If she were to purchase 10000 kgs per order, what would be her total cost per day (purchasing, holding costs, and delivery costs)?
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