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Using and a shipping quantity of units is the lowest cost alternative, with annual total costs to Horizon Cellular of S. (Enter your response as an integer)

Using and a shipping quantity of units is the lowest cost alternative, with annual total costs to Horizon Cellular of S. (Enter your response as an integer)

Practical Management Science
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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Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a circuit board supplier for a new phone soon to be introduced to the market. The annual requirements (D) are 60,000 units and Horizon's plant operates 250 days per year. The data for three suppliers are in the following table. D Annual Freight Costs Shipping Quantity (Q) Annual 10,000 $11,000 Supplier Abbott Baker Carpenter Price/Unit 20,000 (P) $8,500 $30 $6,500 $31 $5,500 Annual Holding Cost/Unit (H) $6.00 $6.20 Lead Time (L) (days) 4 7 Administrative Cost $11,000 $9.000 $9,000 $8,000 $29 $5.80 3 $8,000 Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular? Using and a shipping quantity of units is the lowest cost alternative, with annual total costs to Horizon Cellular of S. (Enter your response as an integer.)
Transcribed Image Text:Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a circuit board supplier for a new phone soon to be introduced to the market. The annual requirements (D) are 60,000 units and Horizon's plant operates 250 days per year. The data for three suppliers are in the following table. D Annual Freight Costs Shipping Quantity (Q) Annual 10,000 $11,000 Supplier Abbott Baker Carpenter Price/Unit 20,000 (P) $8,500 $30 $6,500 $31 $5,500 Annual Holding Cost/Unit (H) $6.00 $6.20 Lead Time (L) (days) 4 7 Administrative Cost $11,000 $9.000 $9,000 $8,000 $29 $5.80 3 $8,000 Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular? Using and a shipping quantity of units is the lowest cost alternative, with annual total costs to Horizon Cellular of S. (Enter your response as an integer.)
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