question archive A toy store has a yearly demand for a thinking game of 900 units (or 75 units per month)
A toy store has a yearly demand for a thinking game of 900 units (or 75 units per month)
Subject:ManagementPrice: Bought3
A toy store has a yearly demand for a thinking game of 900 units (or
75 units per month). The game costs $50 per unit, the shipping cost to the store is $450 per shipment, and the holding cost is $4 per item per year.
i. What is the annual operation cost?
a. $45,000
b. $3,600
c. $1,800
d. 450 units
ii. The manufacturer of the game is willing to give a $1 discount per unit if the toy store purchases 900 units at a time. Should the toy company agree to the deal?
a. No
b. Yes
c. There is not enough data to answer
d. No, but if the manufacturer gives a $2 discount, then the answer is yes
