Introduction to Materials Management 8th Edition by Steve Chapman ,Tony Arnold ,Ann Gatewood ,Lloyd Clive

Exercise 8

The local fire department uses 10,000 alkaline flashlight batteries per year, which cost $4 each. The cost of ordering batteries is estimated to be $50. The current interest rate suggested by the city council is 25%. The sales rep has recently suggested that you could get a discount of 2% for orders of 2000 batteries at a time. Should you take advantage of this special offer?