Wilson industries sources from multiple suppliers and is considering the aggregation of inbound shipments to lower its costs. Truck load shipments costs $500 per truck along with $100 per pickup. Average annual demand from each supplier is 10,000 units. Each unit costs $50 and Wilson incurs a cost of 20%.
What is the optimal order frequency and order lot size if Wilson decides to aggregate 4 suppliers per truck? What is the annual ordering and inventory carrying costs for Wilson? (You do not need to compute the material cost).