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
ChapterC: Cases
Section: Chapter Questions
Problem 3.6A
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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 (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.
D
i
Annual Freight Costs
Shipping Quantity (Q)
(wks)
Cost
Supplier
Sharps
Winkler
5,000
$5,200
$5,400
Price/Unit Annual Holding Lead Time (L) Annual Administrative
10,000 15,000 (P) Cost/Unit (H)
$3,600 $3,200 $3.70
$3.700
$3,400
$0.74
5
$4,000
$5,000
$3.90
$0.78
6
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.)
Transcribed Image Text: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. D i Annual Freight Costs Shipping Quantity (Q) (wks) Cost Supplier Sharps Winkler 5,000 $5,200 $5,400 Price/Unit Annual Holding Lead Time (L) Annual Administrative 10,000 15,000 (P) Cost/Unit (H) $3,600 $3,200 $3.70 $3.700 $3,400 $0.74 5 $4,000 $5,000 $3.90 $0.78 6 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.)
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