Solved: What is the optimal order frequency and order lot size if, Operation Management

What is the optimal order frequency and order lot size if

Wilson industries sources from multiple suppliers and is considering the aggregation of inbound shipments to lower its costs. Truckloads shipping costs $500/ truck along with a $100 per pickup. Avg Annual demand from each supplier is 10,000 units. Each unit costs $50 and Wilson incurs a holding cost of 20%. What is the optimal order frequency and order lot size, if Wilson decides to aggregate 4 suppliers per truck?

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Operation Management: What is the optimal order frequency and order lot size if

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