Demand is 24750000 Ordering costs for riced cauliflower will be high, as each order is experiencing demand from other competitors. Further, transporting vegetables can be difficult - they must be temperature controlled to insure no spoilage and deterioration in the quality of the product as well as speed of delivery. As well, storage costs of these items are high, with the annual per unit carrying cost percentage running at the cost of capital plus 5%. Three different suppliers are available. Midwest Farms Inc. can provide organic produce with a lead time of 10 days at an average ordering cost of $12 (including shipping) per order. Their price is $0.35 per ounce. Pacific Produce LLC can supply organic produce with a lead time of 21 days at an ordering cost of $15 (including shipping). Their price is $0.30 per ounce. Finally, a third company Southeast Supply Corp. could supply organic produce at a cost of $18 per order with a lead time of only 5 days: their price per ounce $0.22.

Determine the ordering policies for each of the three proposed suppliers of riced cauliflower. 

Show calculations. From a purely economic ordering perspective, which of the three suppliers would your team recommend Chez Vous use? 

How much does lead time contribute to cost?

Answer rating: 100% (QA)

Ordering Policy and Supplier Recommendation for Chez Vous 1 Economic Order Quantity EOQ To determine the most economical ordering policy we need to ca... View the full answer