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1. (10pts) A manufacturer uses large quantities of a purchased part in his assembly operations. He wants to use a constant purse lot size, and

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1. (10pts) A manufacturer uses large quantities of a purchased part in his assembly operations. He wants to use a constant purse lot size, and he specifies that no shortages be planned. The annual requirement of the parts is 50,000 units with carrying cost 25% per year and a fixed cost $100 per order. The parts are offered by three sources: Sources A,B and C. Source A will sell the part for $1.00 regardless of the order size. Source B will only accept orders of at least 5,000 at a unit price of $0.98. Source C will charge $0.97 but required a minimum order of 15,000 . a) What are the total relevant costs for the manufacturer buys the part from each of the three sources? b) Which source is the best for the manufacturer

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