Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 1,000 valves; order cost is $13 per order; and annual inventory holding costs are $2.15 per unit. Vendor A Vendor B Vendor C Vendor D Quantity Price Quantity Price Quantity Price Quantity Price 1-49 $35.00 1-74 $34.75 1-99 $34.50 1-199 $34.25 50-74 34.75 75-149 34.00 100-199 33.75 200-399 33.00 75-149 33.55 150-299 32.80 200-399 32.50 400+ 31.00 150-299 32.35 300-499 31.60 400+ 31.10 300-499 31.15 500+ 30.50 500+ 30.75 Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? Chris Sandvig Irrigation should order units at a time from V (enter your response as a whole number).

Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 1,000 valves; order cost is $13 per order; and annual inventory holding costs are $2.15 per unit. Vendor A Vendor B Vendor C Vendor D Quantity Price Quantity Price Quantity Price Quantity Price 1-49 $35.00 1-74 $34.75 1-99 $34.50 1-199 $34.25 50-74 34.75 75-149 34.00 100-199 33.75 200-399 33.00 75-149 33.55 150-299 32.80 200-399 32.50 400+ 31.00 150-299 32.35 300-499 31.60 400+ 31.10 300-499 31.15 500+ 30.50 500+ 30.75 Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? Chris Sandvig Irrigation should order units at a time from V (enter your response as a whole number).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 17P

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Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
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