Mountain Tent Companyorders one ofits maincomponents from three suppliers. The amount ordered from supplier A is 144,000/year, from supplier B is 86,400/year, and from supplier C is 12,000/year. During year 2002, Mountain Tent company used an independent EOQ policy for ordering from each of the three suppliers with a fixed ordering cost $800 plus a supplier-dependent shipping cost with $200/order with supplier A, $60/order with supplier B and $120/order with supplier C. The holding cost is h=$30/(unit,yr). Calculate the total annual operation cost (all ordering and inventory holding costs) based on the EOQ policy for year 2002. The company is thinking to consolidate the supply base by sourcing the total amount only from supplier B, how much the company may save annually in operating costs if the consolidation is taken?

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