Business, 17.04.2020 00:00 vegeta8375

Problem 1: Sarah operates a concession stand at a downtown location throughout the year. One of her most popular items is circus peanuts, selling about 200 bags per month. Sarah pays $1 per bag. Sarah purchases the circus peanuts from Peter's Peanut Shop. She has been purchasing 100 bags at a time. To encourage larger purchases, Peter now is offering her discounts for larger orders according to the following price schedule.

Discount Category Order Quantity Price per Bag
1 1 to 199 $1.00
2 200 to 499 $0.95
3 500 or more $0.90

Sara estimates an annual holding rate of 17% of the value of the peanuts. She also estimates an ordering cost of $4 for placing each order.

Sarah wants to decide which discounted price to adopt (if at all) and how much she should order.

a. 2006
b. 345
c. 354
d. 500

Answers: 1

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Problem 1: Sarah operates a concession stand at a downtown location throughout the year. One of her...

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