Alvarez Incorporated can purchase component X from 3 potential suppliers. Supplier Acharges a fee of $6.50 per component. Supplier B charges $2100 per order plus $2.50per component ordered. Supplier C charges $4.00 per component, and requires thebuyer to pay for at least 300 components (even if the order size is less than 300).4. What is the full range of order sizes where each supplier is optimal?5. Alvarez decided to buy 1000 units of component X from supplier B. Howmuch money could the company have saved if it purchased the 1000 unitsfrom supplier C instead of supplier B?6. Next week supplier B will be running a 18% off special. What equationrepresents the new Total Cost for supplier B during the sale?Hint: plug the same number of units into both the new and the original Total Costequations. The new equation should provide a value that is 18% less than the original. Next week Supplier B will be running a 18% off special. What equationrepresents the new Total Cost for Supplier B during the sale?TCB sale = 2100 + 2.50vO TCB sale = 2100 + 0.18vO TCB saleO TCB sale = 1722 +2.32vO TCB sale = 2100 + 2.32v=1722 + 2.05v

Let, the order quantity = xSupplier A:Price per component = $6.50Total cost equation:Total cost…

Answered: Alvarez Incorporated can purchase…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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