$350 ering The cides The Manula Men price lists are shown in the table. Ordering cost is $50, and annual holding cost per unit is $5. QUANTITY 1-499 BAKER MFG. UNIT PRICE 1-399 ALLEN MFG. UNIT PRICE QUANTITY $16.00 15.50 400-799 15.60 15.00 800+ 15.10 500-999 1,000+ $16.10 the ne all C th al ese an er T- or a) What is the economic order quantity? b) Which supplier should be used? Why? c) What is the optimal order quantity and total annual cost of ordering, purchasing, and holding the component? Px 12.27 Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the accompanying table on the next page. Annual usage is 2,400 valves; order cost is $10 per order; and annual inventory holding costs are $3.33 per unit. Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? PX CHAE VENDOR A VENDOR B QUANTITY PRICE QUANTITY PRICE 1-49 $35.00 1-74 $34.75 as a new C mine the 12 50-74 34.75 75-149 kinds of 34.00 75-149 33.55 is conce 150-299 32.80 150-299 32.35 300-499 31.60 selling units ea 300-499 vore 31.15 MT bo500+10 500+ molin 30.75 500+ 30.50 the yea produ into p VENDOR C VENDOR D QUANTITY PRICE QUANTITY PRICE holdin tion p 1-99 $34.50 1-199 $34.25 ducti 100-199 33.75 200-399 33.00 a) W 200-399 32.50 400+ 31.00 b) If F 400+ 31.10 12.28 Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both tem- perature and humidity can be controlled. Emery uses 800 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $50 per order. The cost schedules of two suppliers are c) 1 d) e) f)