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.

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

Using (Evan/Dover/Farley) is the lowest cost alternative, with annual total costs to Wanda Lux of $_________.

Price/Unit (P) Supplier Dover Plastics Evan & Sons Farley, Inc. Freight Costs $3,000 $3,500 $4,000 $5.10 $5.05 $5.00 Annual Holding Cost/Unit (H) $1.02 $1.01 $1.00 Lead Time Annual Administrative (L) (days) Costs 20 $6,000 13 $4,000 14 $5,000