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ID: 366083 • Letter: P
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Page 3 of 4 Next Page Note: It is recommended that you save your response as you complete each question Question 3 (1 point) The consulting agency typically purchases 75 uniforms per week from a local laundry service to support the workers. Due to the dirty nature of some of this work handling wastewater, the consulting agency averages a cost of $18.05 per uniform. The consulting agency has identified another potential source that will charge $17,95 per uniform. The local laundry service has an average lead-time of two days and delivers the uniforms in batches of 30. The standard deviation on the local laundry service lead-time has been one day. The potential other source states they have an average lead-time of one week with a standard d Which supplier should the consulting agency use? ignore ordering costs and focus on material costs and holding costs when making your decision Recall holding costs are 20% of material cost Assume the consulting agency continuously reviews inventory and aims for a cycle service level of 95% Weekly demand for the uniforms has a mean of 60 with a standard deviation of 10 O Local Laundry Service Potential Other Source Save Next Page Page 3 of 4 Save All Responses Go to Submit Quiz Like Reply 3 hrs Privacy Terms Advertising . Ad Choices CheggHey Todd! When that happens, you can generalY @ither editExplanation / Answer
The consulting agency should use local laundry serive.The potential other source deliver minimum 150 batch size but the requirement is 75 per week.It will increase the holding cost of 20% of 150*17.95=$538.It will be an additional cost for the company.
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