A retail store dealing in computer hardware imports an enterprise model solid-state drive (SSD) at a fixed price of $1,100 per unit from the sole distributer of the SSD. On January 1, 2015, the store received an offer of 12.5% discount on orders of 300 or more units. Provided further that the estimated sales for the year are 500 units, the cost incurred per order is $950 and the average holding cost per unit per annum is estimated to be $110 per unit. The full price is likely to remain $1,100 during the year. Please ignore opening and closing inventories, safety stock etc. What is the Maximum Inventory Level under Discount Order Qty? What is the Annual Holding Cost under Discount Order Qty?
A retail store dealing in computer hardware imports an enterprise model solid-state drive (SSD) at a fixed price of $1,100 per unit from the sole distributer of the SSD. On January 1, 2015, the store received an offer of 12.5% discount on orders of 300 or more units. Provided further that the estimated sales for the year are 500 units, the cost incurred per order is $950 and the average holding cost per unit per annum is estimated to be $110 per unit. The full price is likely to remain $1,100 during the year. Please ignore opening and closing inventories, safety stock etc.
What is the Maximum Inventory Level under Discount Order Qty?
What is the Annual Holding Cost under Discount Order Qty?
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