Question

Ahrens Tech incurs costs of $33 per unit ($21 variable and $12 fixed) to make a widget it normally sells for $58. Ahrens has received two special offers: Wholesaler A offers to buy 9,000 units at $46 each and Wholesaler B offers to buy 15,500 units at $42 each. Assuming Ahrens has the capacity to accept only one of these offers, which one should it accept

Answer 1

Ahrens should accept Wholesaler B offers to buy 15,500 units at $42 each

What is Wholesaler?

The sale of goods or merchandise to retailers, industrial, commercial, institutional, or other professional business users, or other wholesalers and related subordinated services, is known as wholesaling or distributing.

In the supply chain, a wholesaler serves as an intermediary or middleman. The most common type of wholesaler is a company that buys finished products from manufacturers and distributes them to retailers, who then sell smaller quantities of the product to end users.

To summarize the key distinctions, retailers sell goods directly to end users in small quantities. Wholesalers, on the other hand, sell goods to other store owners and retail industry professionals, who then sell the goods to the end user.

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