Dunder Mifflin considers two possible suppliers for reams of pink colored paper:

PaperCo

SupplyMax

Cost per ream

$18.60

$18.75

Minimum order

300

None

For either supplier, Dunder Mifflin incurs a holding cost of 25% per year, and a fixed cost of $60 per order. Assume Dunder Mifflin wants to minimize their total cost (material cost + ordering cost + holding cost). Use a deterministic inventory model.

ROUND ALL ANSWERS TO THE NEAREST UNIT OR NEAREST DOLLAR.

1. If the annual demand is 3000, determine the order quantity and total annual cost for each option:

PaperCo

SupplyMax

Order quantity Q