Question: Upon hearing that Ross White ( see Problems 6 - 2 7 and 6 - 2 8 ) is considering producing the brackets in -

Upon hearing that Ross White (see Problems 6-27 and 6-28) is considering producing the brackets in- house, the vendor has notified Ross that the purchase price would drop from $15 per bracket to $14.50 per bracket if Ross would purchase the brackets in lots of 1,000Lead times, however, would increase to 3 days for this larger quantity (a) What is the total annual inventory cost plus pur- chase cost if Ross buys the brackets in lots of 1,000 at $14.50 each? ( b) If Ross does buy in lots of 1,000 brackets, what is the new ROP? ( c) Given the options of purchasing the brackets at $ 15 each , producing them in- house at $ 14.80, and taking advantage of the discount, what is your recommendation to Ross White ?

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