Question
3. XZ Bearings wants to procure metal for their bearing production. Every month they need 500 units of metal bars of a fixed size. They
3. XZ Bearings wants to procure metal for their bearing production. Every month they need 500 units of metal bars of a fixed size. They have received offers from 2 suppliers. Supplier A sells this bar for a price of $5 per unit while Supplier B sells at a higher price of$8 per metal bar unit. Every order placed at Supplier A costs $3 while it costs $2 for placing an order at Supplier B. Based on your knowledge onTotal cost and EOQ , which supplier should XZ Bearings go with assuming that the quality of metal bars are same from both Supplier A and B.
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