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M.P. Vanoyen Manufacturing has gone out on bid for a regulator component. Expected usage for this component is 8,400 units per year. There are two
M.P. Vanoyen Manufacturing has gone out on bid for a regulator component. Expected usage for this component is 8,400 units per year. There are two suppliers on the market that offer the regulator component required by Vanoyen: Allen Manufacturing and Baker Manufacturing. The cost for placing an order at either of these companies is $50 per order, and the holding cost per unit is 30% of the item's purchase price annually. The prices offered by each firm are shown in the table below: Given the above information, please answer the following questions: a) What is the economic order quantity for each supplier individually? b) Which supplier will M.P. Vanoyen end up using? Why
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