Betapharm contacted Chun Wu, the lowest-bid supplier for detailed information on its order fulfillment policies. For...

  

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Betapharm contacted Chun Wu, the lowest-bid supplier for detailed information on its order fulfillment policies. For a high volume of business between 20,000-30,000 kg, you obtain the following: Order frequency Lead Time Chun Wu Every 5 days 7 days Tao Every 3 days 3 days Also, because Chun Wu has limited cash flow, payments from the buyer are required upon order placement, whereas Tao is willing to ship material C.O.D. (cash on delivery). In Betapharm's Exelon production facility, the daily demand for Malic acid is normally distributed with an average of 70 kg and a standard deviation of 15 kg. Since Exelon is a life saving drug, Betapharm strives to achieve a 99.9% service level for their Malic acid stock. Use the price per kg currently charged by Tao to calculate the current annual inventory holding costs associated with contracting with Tao, and then use Chun Wu's final bid price to see what it would be with Chun Wu. (Assume Betapharm operates 300 days per year. Pharmaceutical-grade Malic acid is highly perishable, and as a result annual inventory holding costs are estimated to be 80% of the value of inventory.) Betapharm contacted Chun Wu, the lowest-bid supplier for detailed information on its order fulfillment policies. For a high volume of business between 20,000-30,000 kg, you obtain the following: Order frequency Lead Time Chun Wu Every 5 days 7 days Tao Every 3 days 3 days Also, because Chun Wu has limited cash flow, payments from the buyer are required upon order placement, whereas Tao is willing to ship material C.O.D. (cash on delivery). In Betapharm's Exelon production facility, the daily demand for Malic acid is normally distributed with an average of 70 kg and a standard deviation of 15 kg. Since Exelon is a life saving drug, Betapharm strives to achieve a 99.9% service level for their Malic acid stock. Use the price per kg currently charged by Tao to calculate the current annual inventory holding costs associated with contracting with Tao, and then use Chun Wu's final bid price to see what it would be with Chun Wu. (Assume Betapharm operates 300 days per year. Pharmaceutical-grade Malic acid is highly perishable, and as a result annual inventory holding costs are estimated to be 80% of the value of inventory.)