This Question: 1 pt This Quiz: 14 pts possib hns Sandvig lit gation Inc. has sum
ID: 433690 • Letter: T
Question
This Question: 1 pt This Quiz: 14 pts possib hns Sandvig lit gation Inc. has summarized the pree lisi om our potential uppliers o an unde ipround contral valve See e table be on Annual u a e is 000 valves order coet i?$7 per order and annual r en ory holdn costs ?e S7 55 per unit Vendor A Vendor E Vendor D Price $35.00 34 75 Price $34.75 4 00 32.00 31.60 30.50 Price $34.50 33 75 32.50 31.10 Price 534.25 33 00 Quan 1-9 75-19 2001 15-49 50-98 100-200 15-49 50.99 100-259 300+ 75-199 200+ 31.15 30 75 which verdor should be selected and wat order quantity is best it Sandv 1mgaton wants to minimize total cost? Chris Sandvig Irrigatiorn shauld ats at a time from fernie enier your respamse as a whole ambeerExplanation / Answer
Demand (D) = 800
Ordering cost (S) = 7
Holding cost (H) = 7.55
EOQ = sqrt(2*D*S/H) = sqrt(2*800*7/7.55) = 39 (Round off)
Total cost = D/EOQ*S + EOQ/2*H + Price*D = 800/EOQ*7 + EOQ/2*7.55 + Price*800 = 5600/EOQ + EOQ*3.775 + Price*800
Cases:
1) Vendor A, Price = 33.55, EOQ = 39
Total cost = 5600/39 + 3.775*39 + 33.55*800 = 27131
2) Vendor A, Price = 32.35, EOQ = 50
Total cost = 5600/50 + 3.775*50 + 32.35*800 = 26181
3) Vendor A, Price = 31.15, EOQ = 100
Total cost = 5600/100 + 3.775*100 + 31.15*800 = 25354
4) Vendor A, Price = 30.75, EOQ = 300
Total cost = 5600/300 + 3.775*300 + 30.75*800 = 25751
5) Vendor B, Price = 34, EOQ = 39
Total cost = 5600/39 + 3.775*39 + 34*800 = 27491
6) Vendor B, Price = 32.8, EOQ = 50
Total cost = 5600/50 + 3.775*50 + 32.8*800 = 26541
7) Vendor B, Price = 31.6, EOQ = 100
Total cost = 5600/100 + 3.775*100 + 31.6*800 = 25714
8) Vendor B, Price = 30.5, EOQ = 300
Total cost = 5600/300 + 3.775*300 + 30.5*800 = 25551
9) Vendor C, Price = 33.75, EOQ = 39
Total cost = 5600/39 + 3.775*39 + 33.75*800 = 27291
10) Vendor C, Price = 32.5, EOQ = 75
Total cost = 5600/75 + 3.775*75 + 32.5*800 = 26358
11) Vendor C, Price = 31.1, EOQ = 200
Total cost = 5600/200 + 3.775*200 + 31.1*800 = 25663
12) Vendor D, Price = 34.25, EOQ = 39
Total cost = 5600/39 + 3.775*39 + 34.25*800 = 27691
13) Vendor D, Price = 33, EOQ = 75
Total cost = 5600/75 + 3.775*75 + 33*800 = 26758
14) Vendor D, Price = 31, EOQ = 200
Total cost = 5600/200 + 3.775*200 + 31*800 = 25583
Ans: Vendor 100, Price 31.15, 100 Units
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