How Much Is Free Freight Worth?

Topics:
Inventory Management
Tags:
Discount,
Effective Inventory Management
Source:
Effective Inventory Management

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Overview: This article examines a process that determines whether or not placing a free-freight order is a good buy. There are instances where profitability can be maximized by paying the freight. The first question to be asked is, how much is free freight worth? It's the dollar amount on the freight bill. This amount is an additional discount offered by the vendor. The article describes the process by which it can be determined whether this discount exceeds the cost of carrying the additional inventory necessary to meet the freight prepaid requirement.

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Format: HTML | Date: Jan 1998 | Pages: 1

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