Company per JMR 80. Placing each order costs OMR 288 and the carrying cost is 5% per year of the average inventory. (a) What is Economic Order Quantity? (b) If the company gets 5% discount if it places an order of 2, 500 units, should the company accept the discount offer or not ?.

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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OSN Company uses 10, 000 units per year of machine tools each costing OMR 80. Placing
each order costs OMR 288 and the carrying cost is 5% per year of the average inventory.
(a) What is Economic Order Quantity?
(b) If the company gets 5% discount if it places an order of 2, 500 units, should the
company accept the discount offer or not ?.
Transcribed Image Text:OSN Company uses 10, 000 units per year of machine tools each costing OMR 80. Placing each order costs OMR 288 and the carrying cost is 5% per year of the average inventory. (a) What is Economic Order Quantity? (b) If the company gets 5% discount if it places an order of 2, 500 units, should the company accept the discount offer or not ?.
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