M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is

675

units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering cost is

$50,

and annual holding cost per unit is

$5.

Allen Mfg.		Baker Mfg.
Quantity	Unit Price	Quantity	Unit Price
1-499	$16.00	1-399	$16.10
500-999	15.50	400-799	15.60
1000+	15.00	800+	15.10

a) What is the economic order quantity if price is not a consideration?

402402

units (round your response to the nearest wholenumber).

b) Which supplier, based on all options with regard to discounts, should be used?

Allen Mfg.

c) What is the optimal order quantity and total annual cost of ordering, purchasing, and holding the component?

The optimal order quantity is

with a total cost of

(round your responses to the nearest whole number).