A company uses Rs. 50000 material per year. The cost per order is Rs. 50 and carrying cost is 20 percent of the average inventory. The company currently has an optimum purchasing policy but has been offered a 0.4 percent discount if the purchase 5 times per year. Should the offer be accepted? If not what counter offer should be made?
Answers
Answer:
Explanation:
company uses yearly material=50,000 RS.
Cost per Order = 50 RS.
Carrying cost=20 percent of average inventory
currently optimum purchasing policy=0.4 percent discount on 5 times per year
Cost per Order = 50 RS.
5 times order cost=50*5=250
Total cost=50,000+250=50.250
discount-0.4%
50,250*(0.4/100)=201
discount =201
250-201=49
we will have to pay 49 rupees more if we purchase five times a year
offer should not be accepted
the offer should be without per order cost
Answer:
company uses yearly material=50,000 RS.
Cost per Order = 50 RS.
Carrying cost=20 percent of average inventory
currently optimum purchasing policy=0.4 percent discount on 5 times per year
Cost per Order = 50 RS.
5 times order cost=50*5=250
Total cost=50,000+250=50.250
discount-0.4%
50,250*(0.4/100)=201
discount =201
250-201=49
we will have to pay 49 rupees more if we purchase five times a year
offer should not be accepted
the offer should be without per order cost