Question
All calculations must be explicitly displayed within the solutions; the use of Excel tables is not permissible: AA is actively developing a weight-loss food supplement
All calculations must be explicitly displayed within the solutions; the use of Excel tables is not permissible: AA is actively developing a weight-loss food supplement named Proctologist, with promising results. With plans to launch in Mexico, where 43% of the population grapples with uncontrolled obesity, the company faces a packaging challenge due to transportation constraints. Identifying 5 suppliers with varying pricing options, Table 1 illustrates the price breakdown. The U.S. demand is 250 units weekly, and Mexican demand is anticipated to be 12.5% lower in the first year. Trelex AA's ordering cost is $275, with an estimated 32% annual holding cost. The base unit price is $6.45, and exceeding storage capacity (875) incurs 50% of the purchasing price paid. Considering the total costs and constraints presented, determine the best supplier. To make a judicious decision, we need further information on the inventory policy (Number of orders, average inventory and days to be supplied for the best option. The options for each supplier are presented in Table 1.
\begin{tabular}{|c|c|c|c|} \hline \multirow{2}{*}{ Option } & \multicolumn{2}{|c|}{ Discount } & Discount \\ \hline 1 & 0 & 899 & 0 \\ \hline 2 & 900 & 1399 & 2.5 \\ \hline 3 & 1400 & 1999 & 3.5 \\ \hline 4 & 2000 & 2999 & 4.5 \\ \hline 5 & 3000 & 3999 & 7.5 \\ \hline 6 & 4000 & over & 8.5 \\ \hline \end{tabular}Step by Step Solution
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