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Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks.

Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks. Eight Flags needs 40,000 gallons(D) of oil annually; the parks operate 50 weeks a year. Management is unsatisfied with the current supplier of oil and has obtained two bids from other suppliers. The data are contained in the following table.
Annual Freight Costs
Shipping Quantity (Q)
Supplier 5,00010,00015,000 Price/Unit (p) Annual Holding Cost/Unit (H) Lead Time (L)(wks) Annual Administrative Cost
Sharps $5,200 $3,700 $3,300 $3.70 $0.746 $4,500
Winkler $5,600 $4,000 $3,700 $4.00 $0.805 $4,000
Which supplier and which shipping quantity will provide the lowest costs for Eight Flags?
Part 2
Using
Sharps
Winkler
and a shipping quantity of
5,000
15,000
10,000
is the lowest cost alternative, with annual total costs to Eight Flags of $
enter your response here. (Enter your response as an integer.)

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