Answer to Question #86161 in Other for Faith

Question

Bara enterprises operates in Kitale town. On annual basis, it orders 480,000 pens form a Nairobi based distributor. A packet of 24 pens delivered to Baras warehouse cost sh 480 including transport charges. The supermarket barrows money from ABC bank of an interest rate of 10% p.a to finance its inventories. The supermarket also incurs sh 1,500 to place an order for the pens and sh 8 carrying cost for each pen

REQUIRED:

i) Calculate the economic order quantity (EOQ) for the pens
ii) Total cost of the EOQ.
iii) For orders for 72,000 pens and above the distributer has offered a discount rate of 10% on delivery price.

Advice the management of the supermarket on whether to take advantages of the discount offer.

Answer 1

Dear Faith, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order