Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a circuit board supplier for a new phone soon to
Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a circuit board supplier for a new phone soon to be introduced to the market. The annual requirements (D) are 40,000 units and Horizon's plant operates 250 days per year. The data for three suppliers are in the following table. 5 0 Annual Freight Costs Shipping Quantity (Q) Price/Unit Annual Holding Lead Time Annual Supplier 10,000 20,000 (p) CostlUnit (H) (L) (days) Administrative Cost Abbott $11,000 $9,000 $29 $5.80 7 $11,000 Baker $9,000 $7,000 $31 $6.20 9 $9,000 Carpenter $10,000 $8,000 $28 $5.60 4 $10,000 Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular? Using Baker and a shipping quantity of 10,000 units is the lowest cost alternative, with annual total costs to Horizon Cellular of $ 1220396 _ (Enter your response as an integer.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started