Question: Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda's

Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda's request, all bids are for a shipping quantity (Q) of

20,000

bottles with annual requirements (D) of

40,000

units. Wanda's factory operates 250 days a year. The following table shows each supplier's price, estimated annual freight costs, and current lead times; management has added estimates for holding costs and administrative oversight costs for each supplier.

Supplier Freight Costs Price/Unit (p) Annual HoldingCost/Unit (H) Lead Time(L) (days) Annual Administrative Costs
Dover Plastics $3,000 $5.15 $1.03 20 $6,000
Evan & Sons $4,500 $5.00 $1.00 18 $3,000
Farley, Inc. $3,500 $5.10 $1.02 17 $4,000

Part 2

a. Which of the three suppliers will provide the lowest annual cost to Wanda Lux?

Using

Dover

Farley

Evan

is the lowest cost alternative, with annual total costs to Wanda Lux of

$enter your response here.

(Enter your response rounded to the nearest whole number.)

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