Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks. Eight Flags needs 30,000 gallons (D) of oil annually; the parks operate 50 weeks a year. Management is unsatisfied with the current supplier of oil and has obtained twobids from other suppliers. The data are contained in the following table.DAnnual Freight CostsShipping Quantity (Q)CostSupplierSharpsWinklerPrice/Unit Annual Holding Lead Time (L) Annual Administrative5,000 10,000 15,000 (P)Cost/Unit (H)$5,000 $3,300 $2,800 $3.80$4,800 $3,200 $2,900 $3.70(wks)3$0.76$4,500$0.744$4,000Which supplier and which shipping quantity will provide the lowest costs for Eight Flags?Usingand a shipping quantity of▼is the lowest cost alternative, with annual total costs to Eight Flags of $. (Enter your response as an integer.)

Total annual cost TC = Material costs + Freight cost + Inventory cost + administrative costs…

Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks. Eight Flags needs 30,000 gallons (D) of oil annually, the parks operate 50 weeks a year. Management is unsatisfied with the current supplier of oil and has obtained two bids from other suppliers. The data are contained in the following table. DA Supplier Sharps Winkler Annual Freight Costs Shipping Quantity (Q) Price/Unit Annual Holding Lead Time (L) Annual Administrative 5,000 10,000 15,000 (p) Cost/Unit (H) (wks) $5,000 $3.300 $2,800 $3.80 $0.76 $4,800 $3.200 $2.900 $3.70 $0.74 Cost $4,500 $4.000 4 Which supplier and which shipping quantity will provide the lowest costs for Eight Flags? Using and a shipping quantity of is the lowest cost alternative, with annual total costs to Eight Flags of $ (Enter your response as an integer)

Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks. Eight Flags needs 30,000 gallons (D) of oil annually, the parks operate 50 weeks a year. Management is unsatisfied with the current supplier of oil and has obtained two bids from other suppliers. The data are contained in the following table. DA Supplier Sharps Winkler Annual Freight Costs Shipping Quantity (Q) Price/Unit Annual Holding Lead Time (L) Annual Administrative 5,000 10,000 15,000 (p) Cost/Unit (H) (wks) $5,000 $3.300 $2,800 $3.80 $0.76 $4,800 $3.200 $2.900 $3.70 $0.74 Cost $4,500 $4.000 4 Which supplier and which shipping quantity will provide the lowest costs for Eight Flags? Using and a shipping quantity of is the lowest cost alternative, with annual total costs to Eight Flags of $ (Enter your response as an integer)

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

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks. Eight Flags needs 30,000 gallons of oil annually; the parks operate 50 weeks a year. Management is unsatisfied with the current supplier of oil and has obtained two bids from other suppliers. The data are contained in Table. Which supplier and which shipping quantity will provide the lowest costs for Eight Flags?
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