A manufacturing firm has gone out on bid to procure a component. Expected demand is 700 units per month. The item can be purchased from either Vendor A or Vendor B. Their price lists are shown in the table. Ordering cost is $50, and annual holding cost per unit is 30% of the item’s value. Vendor AVendor BQuantityUnit PriceQuantityUnit Price1-499$16.001-399$16.10500-99915.50400-79915.601000+15.00800+15.10 Calculate the economic order quantity.From which vendor is the optimal order quantity and what is the total annual inventory cost?

Name: A manufacturing firm has gone out on bid to procure a component. Expec
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Description: A manufacturing firm has gone out on bid to procure a component. Expected demand is 700 units per month. The item can be purchased from either Vendor A or Vendor B. Their price lists are shown in the table. Ordering cost is $50, and annual holding co

The EOQ is the level at which total cost is the lowest.

Answered: Calculate the economic order quantity.…

Business

Operations Management

Calculate the economic order quantity. From which vendor is the optimal order quantity and what is the total annual inventory cost?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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