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 comma 000 bottles with annual requirements (D) of 40 comma 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. LOADING... Supplier Freight Costs Price/Unit (p) Annual Holding Cost/Unit (H) Lead Time (L) (days) Annual Administrative Costs Dover Plastics $4 comma 000 $5.05 $1.01 14 $6 comma 000 Evan & Sons $3 comma 500 $5.15 $1.03 13 $4 comma 000 Farley, Inc. $3 comma 000 $5.10 $1.02 15 $3 comma 000 a. Which of the three suppliers will provide the lowest annual cost to Wanda Lux? Using Dover is the lowest cost alternative, with annual total costs to Wanda Lux of $nothing . (Enter your response rounded to the nearest whole number.)
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