Question
streceived a proposal from one of its suppliers The supplier will give a 10% discount if the product is ordered 6,000 units at a time.
streceived a proposal from one of its suppliers The supplier will give a 10% discount if the product is ordered 6,000 units at a time. However, because of the size of the order, the delivery time is doubled, so the company would need to maintain a sizable safety stock. The carrying cost will continue to be very high because of the strictly controlled storage environment required by the product, the temperature, humidity, atmosphere, etc. Annual usage in units Current unit purchase price Current Proposed 24,000 units 24,000 units $6.00 Proposed new price (after 10% discount) Current order size in units (EOQ) Proposed new order size Present delivery time in days $5.40 2,000 units 6,000 units 30 Proposed new delivery time in days 60 Carrying cost as percentage of unit price 40% 40% Safety stock in units 3,000 units Current proposed cost per purchase order $200 $200 Question 30 In the proposed situation, calculate the total cost of units purchased for the year. O $72,000 $144,000 $129,600 $126,400 $99,600 D Question 31 In the proposed situation, calculate the carrying cost (including safety stock). $6,480 $12,960 1 pts 1 pt $13,760 D Question 32 How much TOTAL advantage would there be in dollars per year in changing to the proposed situation? O $11,920 O $8,960 $2,660 $5,440 $8,180 1 pt
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