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

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

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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MGR Corporation sells table napkins. These are sold by dozen per package for Php 20. They sell 2,000 packages per month. Each package sells at Php 10 and requires 6 days lead time from date of order to date of delivery. The ordering cost is at Php 1.20 and the carrying cost is 10% per annum. a. Assuming that the present inventory level is 200 packages and there is no safety stock, when is the next order placed (use 360 days/year)
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DC Company order 480,000 packs of orange juice per year from a Manila distributor. Atwo-dozen pack case of juice delivered to DC warehouse cost P48 including freightcharges. The company borrows funds at 10 percent interest rate to finance its inventory.DC Company purchasing agent has calculated that it cost P150 to place an order fororange juice and that the annual carrying cost (electricity, insurance, handling ) is P.80for each pack of juice. a. Determine the Economic Order Quantity.b. Would you accept the offer if the Manila distributor offered a 10% discount off thedelivery price for minimum orders of P60,000 packs?
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DC Company order 480,000 packs of orange juice per year from a Manila distributor. Atwo-dozen pack case of juice delivered to DC warehouse cost P48 including freightcharges. The company borrows funds at 10 percent interest rate to finance its inventory.DC Company purchasing agent has calculated that it cost P150 to place an order fororange juice and that the annual carrying cost (electricity, insurance, handling ) is P.80for each pack of juice.Required:a. Determine the Economic Order Quantity.
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MGR Corporation sells table napkins. These are sold by dozen per package for Php 20. They sell 2,000 packages per month. Each package sells at Php 10 and requires 6 days lead time from date of order to date of delivery. The ordering cost is at Php 1.20 and the carrying cost is 10% per annum. Find the following: a) EOQ b) The number of orders per year c) The total cost of buying and carrying the table napkins for the year d) Assuming that the present inventory level is 200 packages and there is no safety stock, when is the next order placed (use 360 days/year)