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. a. Determine the Economic Order Quantity. b. 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. a. Determine the Economic Order Quantity. b. Would you accept the offer if the Manila distributor offered a 10% discount off the delivery price for minimum orders of P60,000 packs?
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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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.
a. Determine the Economic Order Quantity.
b. Would you accept the offer if the Manila distributor offered a 10% discount off the
delivery price for minimum orders of P60,000 packs?
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