1. You place an order for 350 units of inventory at a unit price of $140. The supplier offers terms of 1/10, net 30 A. How long do you have to pay before the account is overdue? if you take the full period, how many should you remit? B. What is the account being offered? How quickly must you pay to get the discount? If you do take the discount, how much should you remit? C. If you don't take the discount, how many interest are you paying implicitly? How many days' credit are you receiving?
2. Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. If the relevant carrying cost per switch assembly is $7.50, and the fixed order cost is $1,300, is Redan's inventory policy optimal? Why or why not?