Question
ABC, Inc., produces a GPS device that is becoming popular in parts of Europe. When ABC produces one of these, a printed circuit board (PCB)
ABC, Inc., produces a GPS device that is becoming popular in parts of Europe. When ABC produces one of these, a printed circuit board (PCB) is used, and it is populated with several electronic components. ABC determines that it needs about 9,600 per year of this type of PCB. Demand is relatively constant throughout the year, and the ordering cost is about $40 per order; the holding cost is 25% of the price of each PCB. Two companies are competing to become the dominant supplier of the PCBs, and both have now offered discounts, as shown in the following table. SUPPLIER A
SUPPLIER _ B Quantity Price Quantity. Price 1-199 $14.00 1-149 $14.10 200-499 13.80 150-349 13.90 500 or more 13.60 350 or more 13.70 If ABC wishes to minimize the total annual inventory cost, which supplier and what quantity should it select? A and Q = 472 B and Q = 473 A and Q =500 B and Q = 470 The correct answer is not provided.
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