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Just a quick question on holding cost. When there is a bulk discount and we are computing the total costs, Lets say that the holding cost per unit is given as percentage of purchase price and on another occasion the holding cost per unit is given as an X amount.
My question is that i know in first case the cost of holding is the percentage of purchase price and as percentage price decreases so does the holding cost per unit.
In case of second where the holding cost per unit is given as an X amount, does the discount will have any affect on holding cost per unit?
I would think it shoud not but i was doing a question and in the answer of it they had changed the holding cost per unit by discount factor.
ThanksWhat you have written is correct.
I think you maybe referring to one of the BPP questions where it is given as a fixed amount and they then change it. They are wrong, and in exam questions it is as you have written.
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