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Demand for vitamins is 10,000 bottles per month. Drugs Online (DO) incurs a fixed order placement, transportation, and receiving cost of $100 each time it places an order for vitamins with the manufacturer.
1. What is the optimal order quantity for the retailer (with no discount) - already done in the slides. Just do it again yourself showing all the calculations.
2. What is the optimal order quantity for the manufacturer
3. What is the optimal order quantity for the combined supply chain (with no discounts) - already done in the slides. Just do it again yourself showing all the calculations.
4. Draw a diagram similar to slide 11-46 to show the impact of the quantity discount outlined in slide 11-52 on the cost to retailer?
5. Draw a diagram (similar to slide 11-46) to show the impact of the quantity discount on profit (i.e. revenue - cost) for manufacturer?
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