Wilson Industries sources from multiple suppliers and is considering the aggregation of inbound shipments to lower its costs. Truckload shipping 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 holding 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 costs)