You are running an independent shop that sells beachwear, accessories, and souvenirs at Rehoboth Beach for nine months out of the year. Your number one selling item is the Ray Ban Wayfarer sun glasses. Your current sun glass supplier is Cool Shades. Cool Shades charges you a wholesale price of $12,960 per gross1, with a shipping charge of $72 per gross. Sun Styles, another suppler, charges $13,104 per gross with a shipping charge of $108 per gross. Your average carrying rate for sun glasses is $0.25 per item.
Given the following information, which suppler should you use.
Cool Shades
(current)
Sun Styles
(proposed)
Average order cycle time (OCT) 18 6
Standard deviation of OCT 3 1
Demand per day 24 24
Service level 99% 99%