Question: A manufacturer purchases three components ( A , B , C ) from three different suppliers. The annual demand and cost of components are as

A manufacturer purchases three components (A, B, C) from three different suppliers. The annual demand and cost of components are as follows:
Component
Annual Demand
Cost
A
240000
$3.00
B
30000
$4.17
C
10800
$7.40
Annual hong cost is 20 of the cost of component. Ordering cost is mainly transport and it is $500 pickup. Right now, the three components are ordered according to their economic order quantity and the pickups are separate for each component at $500 a run. The pickup logistics person says they can pickup components from B and C when the pickup and will charge additional $250 for each stop, instead of paying separate $500 for each pickup. That is they will first load component A from supplier A, then load component from supplier B, and then stop at C to pickup component C in the same run. The total cost $500+$250+$250= $1000. Will you take up the deal based on cost? How does holding and ordering cost change for B and C?

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