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Management Studies

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

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Operation Management, Management Studies

Category:- Operation Management
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