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.

Expert Solution

keosha answered 2 years ago

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

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