Case: MARS (D)
What were MARS total costs per year prior to the new price structure when the diesel engine price was $4,800? Was Mars’s using the EOQ method?
With the volume purchase discounts and warehouse constraints, what is the best ordering quantity?
With the change in supplier and the resulting addition of volume purchase discounts and different transportation rates, how are costs and EOQs affected?
What is the difference between all-unit quantity discount and incremental discount schedules? How would the costs and EOQs differ? Which would be preferable assuming that both share the same cost figures?
How will these changes impact the Lean Manufacturing Philosophy at MARS? What would be the resulting changes in inventory levels?