Blackie's supermarket chain sells Black Flakes, a cereal manufactured by Pony Cereal Company. Demand for Blake Flakes is 1000 boxes per week. Blackie's has an annual holding cost of $200 for each replenishment order it places with Pony. Given that Pony normally charges $2 per box, how much should Blackie's order in each replenishment lot?
Pony runs a trade promotion for a month, lowering the price of Black Flakes to $1.80. How much should Blackie's order in response to the Pony short-term price reduction? How this situation can be considered as a basis for supply chain collaboration?
