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A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes. If the supplier offers 2% discount on the cost of each box when the purchases are in quantities of 300 at a time, should the confectioner accept this offer?

A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes. If the supplier offers 2% discount on the cost of each box when the purchases are in quantities of 300 at a time, should the confectioner accept this offer?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes.

If the supplier offers 2% discount on the cost of each box when the purchases are in quantities of 300 at a time, should the confectioner accept this offer?

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