Quantity Discount Analysis Exercise: purchasing and scourcing course Aleda Maruc
ID: 469750 • Letter: Q
Question
Quantity Discount Analysis Exercise: purchasing and scourcing course
Aleda Marucheck has received the following quote from a supplier of replacement ink cartridges used in laser jet printers:
Quantity Unit Price
1 $23
2 $19
5 $17
10 $13
13 $12
Assignment:
1. Using the format illustrated in Chapter 12, calculate a quantity discount analysis for a quote using specific quantities.
2. What quantity should Aleda order if she wants to receive the lowest incremental costs between quantities?
3. Is there anything unusual about this quote?
4. What must a buyer consider when determining what quantity to purchase?
Explanation / Answer
1. Quantity discount analysis for quote using specific quantities is given below :
2). To receive the lowest incremental cost between quantities, Aleda should order 10 units, wherein she will receive a negiative incremental cost.
3). Yes, the quantity discount for 10 units slab particularly is unusual, because the total cost for 10 units is even less than the total amount for 8 units.
4). A buyer must consider the total cost of onwership, including the ordering and the holding cost while determining what quantity to purchase. Accordingly, the buyer must order a quantity which minimises the total cost of material, as well as the total cost of ordering and inventory holding.
Quantity Unit price Total Amunt Incremental cost 1 23 23 2 19 38 15 3 19 57 19 4 19 76 19 5 17 85 9 6 17 102 17 7 17 119 17 8 17 136 17 9 17 153 17 10 13 130 -23 11 13 143 13 12 13 156 13 13 12 156 0