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Additional Algo 12-4 Quantity Constraints A fabricator uses about 13,500 pounds of steel each week. The fabricator estimates thelr holding cost to be 32% per
Additional Algo 12-4 Quantity Constraints A fabricator uses about 13,500 pounds of steel each week. The fabricator estimates thelr holding cost to be 32% per year. A supplier has offered the fabricator two options. Option 1 is to purchase steel in lots of 35,000 pounds (truckioad). The price per pound for option 1 is $0.18 per pound option 2 is to have steel delivered by rall. The cost per pound for option 2 would be $0.15 per pound. Deliverles by rall will include 150,000 pounds of steel in either case, the suppller will charge the firm a fixed fee of $650 per delivery. What is the total annual ( 52 week) holding and ordering cost of option 2 ? Note: Round your onswer to 2 decimal places
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