Question

Inventory problem (5 points) Sales units Inventory units Fixed $ cost per order Carrying cost, $ per unit Explanation: Discounts (5 points) Calculate cost of giving up discounts, and whether to

take/reject the discount for the following data: Cost of financing Terms of credit Cash If paid Suppliers discount within... net 1 1.00% 2 2.00% 3 1.00% 4 2.00% 5 1.00% 15% Explanation: 10 5 13,000.00 250.00 800.00 13.00 a. Current ordering costs: b. Current carrying cost: c. Optimal ordering quantity (EOQ): d) Saving in total inventory costs: 10 10 10 40 50 60 Cost of giving up discount 40 50 Financing Decision

Fig: 1