M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 700 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their
Allen Mfg. |
|
Baker Mfg. | |
Quantity |
Unit Price |
Quantity |
Unit Price |
1-499 |
$16.00 |
1-399 |
$16.10 |
500-999 |
15.50 |
400-799 |
15.60 |
1000+ |
15.00 |
800+ |
15.10 |
a) What is the economic order quantity if price is not aconsideration? (round your response to the nearest whole number).
b) Which supplier, based on all options with regard todiscounts, should be used?
c) What is the optimal order quantity and total annual cost ofordering, purchasing, and holding the component?
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