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In: Operations Management

Now the supplier is offering Omni a quantity discount of 5% for orders over 1500 units...

Now the supplier is offering Omni a quantity discount of 5% for orders over 1500 units and 10% for

orders over 6000 units. Omni currently orders 1,000 units 5 times a year to meet annual demand.

Omni’s current cost is $3.00, and the selling price is $4.95. The order cost is $42 per unit and the annual

holding cost is $25%. Based on the new discount policy, what is the best strategy for the

purchasing manager to follow.

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Now the supplier is offering Omni a quantity discount of 5% for orders over 1500 units and 10% for order over 6000 units.
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