Question: Answer for C please. M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 725 units per month. The
Answer for C please.
M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 725 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering cost is $55, and annual holding cost per unit is $4.
| Allen Mfg. |
| Baker Mfg. |
|
| Quantity | Unit Price | Quantity | Unit Price |
| 1-499 | $16.00 | 1-399 | $16.10 |
| 500-999 | 15.50 | 400-799 | 15.60 |
| 1000+ | 15.00 | 800+ | 15.10 |
a) What is the economic order quantity if price is not a consideration? 489 units
b) Which supplier, based on all options with regard to discounts, should be used? Allen Mfg.
c) What is the optimal order quantity and total annual cost of ordering, purchasing, and holding the component? The optimal order quantity is _____ with a total cost of _____(round your responses to the nearest whole number).
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