Assignment:
M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 675675 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering cost is $5050 and annual holding cost per unit is $77.
|
Allen Mfg.
|
Baker Mfg.
|
|
Quantity
|
Unit Price
|
Quantity
|
Unit Price
|
|
1-499
|
$16.00
|
1-399
|
$16.10
|
|
500-999
|
15.50
|
400-799
|
15.60
|
|
1000+
|
15.00
|
800+
|
15.10
|
a) What is the economic order quantity if price is not a consideration _____ units (round your response to the nearest whole number).
b) Which supplier should be used?
c) What is the optimal order quantity and total annual cost of ordering, purchasing, and holding the component?