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Should Chandler Manufacturing order pumps at a time

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Question - Chandler manufacturing has a demand for 1000 pumps each year. The cost of a pump is $50. It costs Chandler Manufacturing $40 to place an order, and the carrying cost is 25% of the unit cost. If pumps ordered in quantities of 200, Chandler Manufacturing can get a 3% discount on the cost of the pumps. Should Chandler Manufacturing order 200 pumps at a time and take the 3% discount?

Reference no: EM133058085

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