12.27 Chris Sandvig Irrigation, Inc., has summarized theprice list from four potential suppliers of an underground controlvalve. See the accompanying table. Annual usage is 2,400 valves;order cost is $10 per order; and annual inventory holding costsare $3.33 per unit.Which vendor should be selected and what order quantity isbest if Sandvig Irrigation wants to minimize total cost? PXVENDOR AQUANTITY1-4950-7475-149150-299300-499500+VENDOR CQUANTITY1-99100-199200-399400+PRICE$35.0034.7533.5532.3531.1530.75PRICE$34.5033.7532.5031.10VENDOR BQUANTITY1-7475-149150-299300-499500+PRICE$34.7534.0032.8031.6030.50VENDOR DQUANTITY1-199200-399400+PRICE$34.2533.0031.00

EOQ = 120 units (rounded to nearest integer since decimal value cant be procured)

Answered: Chris Sandvig Irrigation, Inc., has…

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter2: The Purchasing Process

Section: Chapter Questions

Problem 1GPE

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Chris Sandvig Irrigation, Inc., has summarized theprice list from four potential suppliers of an underground controlvalve. See the accompanying table on the next page. Annual usageis 2,400 valves; order cost is $10 per order; and annual inventory holding costs are $3 .33 per unit.Which vendor should be selected and what order quantity isbest if Sandvig Irrigation wants to minimize total cost?
Chris Sandvig Irrigation, Inc., has summarizedthe price list from four potential suppliers of an undergroundcontrol valve. See the accompanying table. Annual usage is2,400 valves; order cost is $10 per order; and annual inventory holding costs are $3.33 per unit.Which vendor should be selected and what order quantityis best if Sandvig Irrigation wants to minimize total cost?
Whole Nature Foods sells a gluten-free product for which theannual demand is 5,000 boxes. At the moment, it is paying $6.40 for each box; carrying cost is 25% of the unit cost; order-ing costs are $25. A new supplier has offered to sell the same item for $6.00 if Whole Nature Foods buys at least 3,000 boxesper order. Should the firm stick with the old supplier, or takeadvantage of the new quantity discount?
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Santos Company buys 500 boxes of items A-1 every two months. Order costs are P380per order. Carrying cost are P1 per unit , and vary directly with inventory investment.Currently the company purchases the item for P5 each. a. What is the order –size decision the company should make, if the supplier give a 5%discount for order sizez of P3,000 units?
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Q2. Compare the performance of the following two suppliers based on the SCOR model we covered in terms of reliability, responsiveness, and cost. Supplier1 Supplier2 Supplier3 Total perfect orders fulfilled 19 13 17 Sum of actual cycle times for all orders delivered 1 days 1,5 days 2 days Total number of orders 25 15 17 Total number of orders delivered 21 14 17 Unit Cost to plan and source 20 TL 20TL 19TL Unit Cost to deliver 5TL 5TL 5,2TL Unit Cost to return 4TL 4TL 4TL
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