DC Company order 480,000 packs of orange juice per year from a Manila distributor. A two-dozen pack case of juice delivered to DC warehouse cost P48 including freight charges. The company borrows funds at 10 percent interest rate to finance its inventory. DC Company purchasing agent has calculated that it cost P150 to place an order for orange juice and that the annual carrying cost (electricity, insurance, handling ) is P.80 for each pack of juice. Would you accept the offer if the Manila distributor offered a 10% discount off the delivery price for minimum orders of P60,000 packs?
DC Company order 480,000 packs of orange juice per year from a Manila distributor. A two-dozen pack case of juice delivered to DC warehouse cost P48 including freight charges. The company borrows funds at 10 percent interest rate to finance its inventory. DC Company purchasing agent has calculated that it cost P150 to place an order for orange juice and that the annual carrying cost (electricity, insurance, handling ) is P.80 for each pack of juice. Would you accept the offer if the Manila distributor offered a 10% discount off the delivery price for minimum orders of P60,000 packs?
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
Related questions
Question
DC Company order 480,000 packs of orange juice per year from a Manila distributor. A
two-dozen pack case of juice delivered to DC warehouse cost P48 including freight
charges. The company borrows funds at 10 percent interest rate to finance its inventory.
DC Company purchasing agent has calculated that it cost P150 to place an order for
orange juice and that the annual carrying cost (electricity, insurance, handling ) is P.80
for each pack of juice.
Would you accept the offer if the Manila distributor offered a 10% discount off the
delivery price for minimum orders of P60,000 packs?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Recommended textbooks for you
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning