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The Beadwell manufacturing company is weighing its options to source Component X. Supplier A would cost $3000 per order plus $2.50 for each unit ordered.

The Beadwell manufacturing company is weighing its options to source Component X.

Supplier A would cost $3000 per order plus $2.50 for each unit ordered. If Beadwell buys component X from Supplier B, it would cost $6.00 per unit. Beadwell also has the option to buy X from Supplier C that charges $5.00 per unit, but requires buyers to pay for a minimum of 400 units (even if they require less than 400). Shipping costs are the same for all suppliers.

Supplier A will be running a 20% off special next week. What will the new Total Cost equation look like for Supplier A during the sale?

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TCA sale = 3000 + 2.00v

TCA sale = 2400 + 2.50v

TCA sale = 2400 + 2.00v

TCA sale = 3000 + 2.20v

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