that will minimize total cost.16. A company will begin stocking remote control devices. Expected monthly demand is 800 units. Thecontrollers can be purchased from either supplier A or supplier B. Their price lists are as follows:SUPPLIER ASUPPLIER BQuantityUnit PriceQuantityUnit Price1-199$14.001-149$14.10200–49913.80150–34913.90500+13.60350+13.70Chapter Twelve Inventory ManagementOrdering cost is $40 and annual holding cost is 25 percent of unit price per unit. Which suppliershould be used and what order quantity is optimal if the intent is to minimize total annual costs?

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Answered: Ordering cost is $40 and annual holding…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 30P

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Ordering cost is $40 and annual holding cost is 25 percent of unit price per unit. Which supplier should be used and what order quantity is optimal if the intent is to minimize total annual costs?