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Sundar Electricals needs 60,000 pieces of aluminum bars to produce switchgears. The price of each bar is Rs.100, cost of placing an order is Rs.1,200
Sundar Electricals needs 60,000 pieces of aluminum bars to produce switchgears. The price of each bar is Rs.100, cost of placing an order is Rs.1,200 and the carrying cost is 1 percent. The purchase manager has set the economic order quantity based on the EOQ model as 12,000 units. Recently, a supplier has offered discount of 3 percent against an order size of 20,000 units or more. What will be the incremental benefit to the company, if such discount is availed of?
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