KC Engineering Works (KCEW) sells compressors for air conditioning units to several HVAC dealers in the Midwest region. The annual demand for the compressors is 73,000 units. For the reasons of simplicity assume that the demand is uniform throughout the year. Each compressor unit weighs 10 lbs. KCEW buys the compressors at $150 a piece directly from the manufacturer based in Louisville, KY, in batch sizes that minimize its overall cost. They maintain a safety stock that is 25% of the demand during the lead-time and that the holding cost is 20%. They have received the following transportation proposals from different providers. Assume 365 days per year. Carrier Name Minimum Shipment Rate Lead (cwt*) ($/cwt) Time (days) BNSF Railway 300+ 8.50 12 C.H. Robinson 50+ 14.00 8 UPS Supply Chain Solutions 100-200 12.00 200-400 10.00 9 400+ 6.50 9 *1 cwt = 100 lbs. 9 What is the annual transportation cost of KCEW if it buys compressors in batch sizes of 1,500 and uses UPS Supply Chain Solutions as the transportation provider? $65,000 O $18,000 O $24.700 O $87,600 O $73,000