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SharkNinja is between two suppliers for motors used in production of its vacuum cleaners. Annual holding cost is 2 0 % of the purchase cost

SharkNinja is between two suppliers for motors used in production of its vacuum cleaners. Annual holding cost is 20% of the purchase cost of the motor per unit per year. Demand for the motors is normally distributed with a mean of 94 units per week and a standard deviation of 31 units per week. SharkNinja uses a service level of 97% for these motors. Assume SharkNinja operates 7 days per week, 52 weeks per year, and 364 days per year.
SharkNinja has collected the information on related costs from both suppliers in Table 1. Supplier A has a lower procurement cost per unit but it is slower and less reliable with a higher fixed order cost. SharkNinja would like to consider a total cost of ownership approach to determine which supplier to use.
Supplier A Supplier B
Procurement Cost per unit $42 $46
Mean Lead Time in weeks 42
Standard Deviation of Lead Time in weeks 51
Fixed Cost of Placing Orders $14,743 $1,807
SharkNinja uses a "managerial" (R,Q) policy such that regardless of which supplier it chooses it will set its order quantity using the EOQ formula and its reorder point to achieve the desired level of service. Answer this question (provide full and final answer): Enter the absolute value of the difference in the total annual costs for the two options.

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