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M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 725725 units...

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Question

General Management

M. P. VanOyen Manufacturing has gone out on bid for a regulatorcomponent. Expected demand is

725725

units per month. The item can be purchased from either AllenManufacturing or Baker Manufacturing. Their price lists are shownin the table. Ordering cost is

?$5555?,

and annual holding cost per unit is

?$55.

??????????????????????????????????????????????????????????????????????????????????????

  ??????????????????????????????????????????????????

Allen Mfg.

Baker Mfg.

Quantity

Unit Price

Quantity

Unit Price

?1-499

?$16.00??

?1-399

?$16.10??

?500-999

15.50

?400-799

15.60

?1000+

15.00

?800+

15.10

?a) What is the economic order quantity if price is not a?consideration?

437437

units ?(round your response to the nearest whole?number).

?b) Which? supplier, based on all options with regard to?discounts, should be? used?

Allen Mfg.

?c) What is the optimal order quantity and total annual cost of?ordering, purchasing, and holding the? component?

The optimal order quantity is

?????

with a total cost of

???

?(round your responses to the nearest whole?number).

Answer & Explanation Solved by verified expert
4.0 Ratings (578 Votes)
Optimal Order Qty41943Cost for The Year13293732707Annual Demand8708700Ordering    See Answer
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