* Zesto Company order 480,000 packs of apple juice per year from a Marikina distributor. A two-dozen pack case of juice delivered to Zesto warehouse cost P48 including freight charges. The company borrows funds at 10 percent interest rate to finance its inventory. Zesto Company purchasing agent has calculated that it cost P150 to place an order for apple juice and that the annual carrying cost (electricity, insurance, handling ) is P.80 for each pack of juice. Required: a. Determine the Economic Order Quantity. b. Would you accept the offer if the Marikina distributor offered a 10% discount off the delivery price for minimum orders
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Zesto Company order 480,000 packs of apple juice per year from a Marikina distributor. A two-dozen pack case of juice delivered to Zesto warehouse cost P48 including freight charges. The company borrows funds at 10 percent interest rate to finance its inventory. Zesto Company purchasing agent has calculated that it cost P150 to place an order for apple juice and that the annual carrying cost (electricity, insurance, handling ) is P.80 for each pack of juice.
Required:
a. Determine the Economic Order Quantity.
b. Would you accept the offer if the Marikina distributor offered a 10% discount off the delivery price for minimum orders of P60,000 packs?
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