On the average, a firm has an 8-week lead time for work-in-process, and annual cost of goods sold is $12 million. Assuming that the company works 50 weeks a year: a. What is the dollar value of the work-in-process? b. If the lead time could be reduced to 6 weeks, what would be the reduction in WIP?
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
On the average, a firm has an 8-week lead time for work-in-process, and annual cost of goods sold is $12 million. Assuming that the company works 50 weeks a year: a. What is the dollar value of the work-in-process? b. If the lead time could be reduced to 6 weeks, what would be the reduction in WIP?
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