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Management Studies

Problem:

Happy Pet, Inc., is a large pet store located in Long Beach Mall. Although the store specializes in dogs, it also sells fish, turtle, and bird supplies. The Everlast Leader, a leather lead for dogs, costs Happy Pet $7 each. There is an annual demand for 6,000 Everlast Leaders. The manager has determined that the ordering cost is $20 per order and the carrying cost, as a percentage of unit cost, is 15%.

Happy Pet is now considering a new supplier of Everlast Leaders. Each lead would cost only $6.65; but in order to get this discount, Happy Pet would have to buy shipments of 3,000 at a time.

Required:

Question 1) Should Happy Pet use the new supplier and take this discount for quantity buying?

Question 2) What is the total cost without the discount?

Question 3) What is the total cost with the discount? Solve the problem and show all work.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91169035

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