Question: Acme has found an alternative supplier for the sub - assembly who will charge them $ 1 2 0 per unit. However, this supplier is
Acme has found an alternative supplier for the subassembly who will charge them $ per unit. However, this supplier is in China, and is perceived to be riskier in terms of product integrity and supply disruption. As a result of this, Acme will only buy units per year from them, and the interest and risk premiums charged will increase their inventory holding costs to of the unit per year. The increased complexity of the ordering process has raised the cost per order to $ If they accept this new supplier for the quantity, what should their Optimal Order Quantity from the China supplier be
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
