Should the company take advantage of the quantity discounts, Operation Management

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Should the company take advantage of the quantity discounts

A grocery store orders paper bags in cases from a supplier. It uses about 2,300 cases of bags per year. Its ordering costs are $65 per order and the carrying cost is 35% of the acquisition cost. The supplier offers the following pricing structure:
Cases Price per Case

1-49 cases $129.95
50-249 cases $127.95
250-999 cases $126.95
1000+ cases $125.95

a. What is the EOQ?

b. At the EOQ, what are the total costs for the year?

c. Should the company take advantage of the quantity discounts? If so, at what quantity should it order? What would be the total costs?

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Operation Management: Should the company take advantage of the quantity discounts

Reference No:- TGS080685

Have a Question? (oR Write a Review)

Recent Questions Asked Operation Management

Q : Develop a level capacity plan for the company

Q : What is polluted water

Q : What does the author of the text mean by cloud

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Request for Solution File

Ask an Expert for Answer!!

Operation Management: Should the company take advantage of the quantity discounts

Reference No:- TGS080685

Recent Questions Asked Operation Management

Q : Develop a level capacity plan for the company

Q : What is polluted water

Q : What does the author of the text mean by cloud

Q : How much would green co. record as a note payable

Q : Should the company take advantage of the quantity discounts

Q : The cost of merchandise sold for the year

Q : What would be recorded as a gain (loss) on the transfer

Q : Imagine that you work for a consulting firm

Q : What was supplies expense for carolina mills

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