Author Question: If Tim decides to increase his purchase to 2500 units, which vendor should he place the order with ... (Read 91 times)

P68T · **on:** Sep 11, 2018

If Tim decides to increase his purchase to 2500 units, which vendor should he place the order with and explain why?

What will be an ideal response?

Question 2

The publication that keeps readers apprised of the news in the fashion industry including fashion trends, business news, stock market information regarding fashion companies, importing and exporting information, up-and-coming designers, and manufacturers:

a. Vogue c. Good Housekeeping
b. Women's Wear Daily d. In Style

leannegxo · **Reply #1 on:** Sep 11, 2018

Answer to Question 1

Unit cost of wallets from Yiwu if Tim buys 2500 units:
Original cost per wallet= 25.25, less 15 quantity discount = 21.46
21.46 Less 8 cash discount = 19.74
The unit price of a wallet decreases significantly to 19.74 if Tim buys from Yiwu Leather taking advantage of quantity and cash discounts. Shenzhen Leather unit price remains unchanged to 23.38 regardless of the quantity Tim is buying. Just looking at basic unit cost Yiwu Leather seems to be a prudent choice. The cost is less, plus Tim will have 3 color ways instead of only 2 that Shenzhen Leather is offering. Yiwu is also offering promotional aid in form of display cases and poster to help promote and sell the product. This can be advantageous especially for introducing a new product such as these wallets.
The downside of placing order with Yiwu Leather is that Tim will be going over his buying plan by 1000 units and the payment to this vendor has to be made in 10 days from Invoice date to get the cash discounts. If he goes with other vendor he can stick to his 1500 unit plan and get a 90 day credit period to pay.

Answer to Question 2

b