Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 46

The Fifth Quarter Bar buys Old World draft beer by the barrel from a local distributor. The bar has an annual demand of 900 barrels, which it purchases at a price of $205 per barrel. The annual carrying cost is 12% of the price, and the cost per order is $160. The distributor has offered the bar a reduced price of $190 per barrel if it will order a minimum of 300 barrels. Should the bar take the discount