The ordering costs for this item are zero

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Reference no: EM132299515

A buyer is managing an item with demand of 100 items spread evenly throughout the year. The supplier offers a special deal to the buyer. They can purchase all 100 units at one time at a discounted price of $100 each. The other option is to procure ten items at a time at a price of $130. The company has calculated the carrying cost at 20% per year. Additionally, the ordering costs for this item are zero. What is the potential savings (if any) by accepting this deal?

Reference no: EM132299515

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