Please solve Questions 3 & 4 cost, ordering costs are $25. A new supplier called
ID: 457063 • Letter: P
Question
Please solve Questions 3 & 4
cost, ordering costs are $25. A new supplier called Uh the supplier called AI), in is paying as an endant, we are seen is a gluten-free preseaon and on one seements, in an emains the Whole Nature Foods buys at least 3 oo boxes per demand are the same in both options. a 22 hams Atlanta announcement order to give us an online its 3. Based on Dataset 1minimize total cost assassins should Whole Nature Food stick with the old . the , to and then we can call me discount (buy from A2)? supplier AI or inventors in a a. Buy from Al b. Buy from A2 c. Not enough information to answer this question d. Both suppliers are equally attractive in terms of cost e. None of the above Based on dataset 1, what is the difference in total cost between these two apiens. a. 3560 $ b. 120 $ 2200 $ 40 $ c. d, e, 1000 $Explanation / Answer
Given annual demand = 5000 boxes A1 A2 Cost per box = 6.40 Cost per box = 6.00 Ordering cost = 25 Ordering cost = 25 Carrying cost = 25% Carrying cost = 25% Minimum order = 3000 boxes per order EOQ = Sqrt ( 2U*O/C) EOQ = Sqrt ( 2U*O/C) Where Where U= 5000 U= 5000 O= 25 O= 25 C = 6.40*25% = 1.6 C = 6.00*25%= 1.5 EOQ= 395 units EOQ= 408 But given minimum order is 3000 boxes per order total inventory cost per annum = C*(Q/2)+F(D/Q)+U*CB total inventory cost per annum = C*(Q/2)+F(D/Q)+U*CB where where C= Carrying cost per unit per annum C= Carrying cost per unit per annum Q= Quantity per each order Q= Quantity per each order F= fixed cost per order F= fixed cost per order D= demand D= demand U=Annual demand U=Annual demand CB= cost per box CB= cost per box total inventory cost per annum = C*(Q/2)+F(D/Q)+U*CB total inventory cost per annum = C*(Q/2)+F(D/Q)+U*CB =1.6*(395/2)+25*(5000/395)+(5000*6.4) = 32640 =1.5*(3000/2)+25*(2)+(5000*6.0) = 32300 Hence it is better to buy from the new vendor A2 Since it result in reduced cost of $ 340