Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Skatz Company is one of the major manufacturers of roller skates. They only assemble at their plant and buy all the components from external suppliers.

Skatz Company is one of the major manufacturers of roller skates. They only assemble at their plant and buy all the components from external suppliers. They are not happy with the current wheel supplier and decided to find a new source for their best model. The demand is 400,000 wheels a year and they have received different pricing plans from other vendors. Vendor A has the following discount plan on all units: $ 3.25 per wheel if the quantity ordered is less than 5,000, $ 3.00 per wheel if the quantity ordered is greater than 5,000 and less than 15,000, and $ 2.60 per wheel if they order more. of 15,000. Vendor B offers a price of $ 3.25 if the order is less than 10,000 and $ 2.8 3 per wheel for each unit purchased beyond 10,000, using an incremental discount. The two suppliers have the same quality of wheels. The cost of the order is $ 150 and the cost of holding the inventory is taken as 30% per year. a) Evaluate the optimal quantity to order. b) Calculate the total annual cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The ISO 14000 EMS Audit Handbook

Authors: Greg Johnson

1st Edition

1574440691, 978-1574440690

More Books

Students also viewed these Accounting questions

Question

5. Structure your speech to make it easy to listen to

Answered: 1 week ago

Question

1. Describe the goals of informative speaking

Answered: 1 week ago