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XYZ , Inc., produces a GPS device that is becoming popular in parts of Europe. When the company produces one of these, a printed circuit

XYZ, Inc., produces a GPS device that is becoming popular in parts of Europe. When the company produces one of these, a printed circuit board (PCB) is used, and it is populated with several electronic components. It determines that it needs about 9,600 per year of this type of PCB. Demand is relatively constant throughout the year, and the ordering cost is about $40 per order, the holding cost is 25% of the price of each PCB. Two companies are competing to become the dominant supplier of the PCBs, and both have now offered discounts, as shown in the following table. SUPPLIERA SUPPLIER Quantity 1-199 $14.00 $14.10200-49913.30150-3491390500 or more 1360350 or more 13.70 If XYZ wishes to minimize the total annual inventory cost and chooses Suppler A, what would be the annual inventory cost for the quantity that it should order?

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