NAME: OPM301, 10 April 2021 Problem 4: (30 points) A manufacturer of wooden doors wants to find a new supplier for wood. This company has an average annual demand of 4,500 meters and the operating period is 50 weeks a year. The manufacturer has two suppliers that have made offers to supply the wood. The first supplier has a lower price but a variable lead time. The second supplier has a higher price, but a constant lead time. The doors manufacturer experiences a constant average weekly demand of 80. In both cases the annual holding cost is 15% of the value of the wood. The manufacturer wishes to have a 97.5% service level. Complete the following table; round values to the nearest whole number. Supplier 1 Supplier 2 $28 Order Cost $16 Price $17 per meter $23 per meter 1.5 weeks Lead Time (LT) 1 week 1 week 0 Standard Deviation of LT Optimal Order Quantity (4 points) Total Holding Cost (4 points) ROP (6 points) Safety Stock (SS) (4 points) Total Cost, including Price and SS (6 points) Show your work for Supplier 1 here: Show your work for Supplier 2 here: Page 14 of 16 OPM301, 10 April 2021 NAME: Conclusion: (a) (3 points) Given your analysis, which supplier should the manufacturer choose? Why? (b) (1 point) What additional safety stock cost the manufacturer is incurring if he opts for supplier 12 (c) (2 points) List two additional considerations that the manufacturer should think about before choosing a supplier