How much should dominicks order be given the short-term, Operation Management

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How much should dominicks order be given the short-term

Dominic's supermarket chain sells Nut Flakes, a popular cereal manufactured by the Tastee cereal company. Demand for Nut Flakes is 1,000 boxes per week. Dominick's has a holding cost of 25 percent and incurs a fixed trucking cost of S200 for each replenishment order it places with Tastee.

(a) Tastee runs a trade promotion, lowering the price of Nut Flakes to $1.80 for a month. How much should Dominick's order be, given the short-term price reduction?

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