Having some doubt regrding the Working capital arithematic 2 in Revision Notes of OT..
to calculate the holding cost the discount of 1% is used regardless of the order size.. Why dont we use the purchase price of that level of ordering the quantitiy?
It is a typing mistake in the workings – sorry.
If you calculate yourself the total holding costs you will find that the totals are correct in the answer and do take account of the higher discounts.
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