- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
Hi sir,
I have doubt in this part d) with discount why in holding cost ch*Q/2 why they didn’t did discount here. They only apply discount in purchase cost why ?? Usually we do discount in purchasing cost and holding cost. Can you please explain e why they didn’t did discount in holding cost. I see in most qstns they didn’t did discount in holding cost. But I see your lectures in that eg 3) have discount in both holding and purchasing. I am very confused now can you please explain me the reason. Thank you in advance.
If the holding cost is given in $’s as it is in FLG, then it stays at the same cost whether or not there is a discount.
If, on the other hand, the holding cost is given as a % of purchase price (as in my lecture example) then if the purchase price is lower because of the discount then the holding cost is automatically lower as well.
- The topic ‘FLG co (jun 2008)’ is closed to new replies.