Sorur Inc. has gone out on bid for an electronic component. Expected demand is 500 units...

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Sorur Inc. has gone out on bid for an electronic component.Expected demand is 500 units per month. The item can be purchasedfrom either Asha Manufacturing or Brian Manufacturing. Their priceschedule is shown below. Ordering cost is $25, and annual holdingcost per unit is $15.
AhsaMfg.Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Brian Mfg.Â Â
QuantityÂ Â Â Â Â Â Â Â Â Â Â Â Â Price/unitÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â QuantityÂ Â Â Â Â Â Â Â Â Â Â Â Â Price/unit
1-199Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $20.00Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1 â€“ 299Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $20.00
200 â€“399Â Â Â Â Â Â Â Â Â Â Â Â $19.80Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 300 â€“599Â Â Â Â Â Â Â Â Â Â Â Â $19.75
400+Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $19.60Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 600+Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $19.50
What is the optimal order quantity?Which supplier should be used?

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Monthly demand 500 units Yearly demand 500 x 12 6000 Units Ordering cost 25 Holding cost 15 per unit per year Optimal Order quantity EOQ Sqrt 2 x Annual demand x Ordering cost Holding cost Sqrt 2 x 6000 x 25 15 See Answer

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