Last Updated on February 4, 2022 by Admin 2
A supplier is offering a price discount if more is ordered at one time. The offer should be analyzed to determine if a larger order is appropriate considering:
- the impact of the increase in average inventory levels on ABC designations
- the reduction in material cost compared to the impact on total holding costs
- the impact of additional items on indirect costs
- the increase in transportation costs compared to the reduction in ordering cost
Explanation:
Reference: https://www.slideshare.net/UmairArain2/supply-chain-management-chap-11