Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Venus Industries consumes 20,000 units p.a. of a particular component. The supplier has offered the following pricing based on order size: Order Quantity (no of

Venus Industries consumes 20,000 units p.a. of a particular component. The supplier has offered the following pricing based on order size:

Order Quantity

(no of units per order)

Cost per unit (Rs)

500 - 999

148

1,000 – 1,999

146

2,000 – 4,999

143

5,000 or More

142

For each order, the freight + delivery cost incurred is Rs 3,500, and administrative + documentation cost is Rs 500. Venus has estimated the carrying cost of inventory at Rs 50 per unit per annum. 

What is the best option for Venus to minimize its total cost?

Step by Step Solution

3.45 Rating (132 Votes )

There are 3 Steps involved in it

Step: 1

To determine the best option for Venus Industries to minimize its total cost we need to calculate the total cost for each order quantity option and co... blur-text-image

Get Instant Access with AI-Powered 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

Managing Supply Chain and Operations An Integrative Approach

Authors: Thomas Foster, Scott E. Sampson, Cynthia Wallin, Scott W Webb

1st edition

132832402, 978-0132832403

More Books

Students also viewed these Accounting questions

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago

Question

Define a traverse in Surveying?

Answered: 1 week ago