Chris Sandvig Irrigation, Inc., has summarized the price list from four potentia

Question

Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 1,100 valves; order cost is $12 per order, and annual inventory holding costs are $7.55 per unit. Vendor A Vendor B Vendor C Vendor D Quantity 1-14 15-24 25-99 100-199 200-399 400+ Price $35.00 34.75 33.55 32.35 31.15 30.75 Quantity 1-24 25-99 100-199 200-399 400+ Price $34.75 34.00 32.80 31.60 30.50 Quantity 1-49 50-149 150-299 300+ Price $34.50 33.75 32.50 31.10 Quantity 1-149 150-299 300+ Price $34.25 33.00 31.00 Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? Chris Sandvig Irrigation should orderunits at a time from (enter your response as a whole number)

Explanation / Answer

D 1100 Order cost 12 Vendor A Q Order Cost Holding cost Product Price Total Prod cost Total cost 1 13200 3.775 35 38500 51703.78 14 942.85714 52.85 35 38500 39495.71 15 880 56.625 34.75 38225 39161.63 24 550 90.6 34.75 38225 38865.6 25 528 94.375 33.55 36905 37527.38 99 133.33333 373.725 33.55 36905 37412.06 100 132 377.5 32.35 35585 36094.5 199 66.331658 751.225 32.35 35585 36402.56 200 66 755 31.15 34265 35086 Min 399 33.082707 1506.225 31.15 34265 35804.31 400 33 1510 30.75 33825 35368 500 26.4 1887.5 30.75 33825 35738.9 Vendor B Q Order Cost Holding cost Product Price Total Prod cost Total cost 1 13200 3.775 34.75 38225 51428.78 24 550 90.6 34.75 38225 38865.6 25 528 94.375 34 37400 38022.38 99 133.33333 373.725 34 37400 37907.06 100 132 377.5 32.8 36080 36589.5 199 66.331658 751.225 32.8 36080 36897.56 200 66 755 31.6 34760 35581 399 33.082707 1506.225 31.6 34760 36299.31 400 33 1510 30.5 33550 35093 Min 500 26.4 1887.5 30.5 33550 35463.9 Vendor C Q Order Cost Holding cost Product Price Total Prod cost Total cost 1 13200 3.775 34.5 37950 51153.78 49 269.38776 184.975 34.5 37950 38404.36 50 264 188.75 33.75 37125 37577.75 149 88.590604 562.475 33.75 37125 37776.07 150 88 566.25 32.5 35750 36404.25 299 44.147157 1128.725 32.5 35750 36922.87 300 44 1132.5 31.1 34210 35386.5 Min 400 33 1510 31.1 34210 35753 500 26.4 1887.5 31.1 34210 36123.9 Vendor D Q Order Cost Holding cost Product Price Total Prod cost Total cost 1 13200 3.775 34.25 37675 50878.78 149 88.590604 562.475 34.25 37675 38326.07 150 88 566.25 33 36300 36954.25 299 44.147157 1128.725 33 36300 37472.87 300 44 1132.5 31 34100 35276.5 Min 400 33 1510 31 34100 35643 500 26.4 1887.5 31 34100 36013.9 Total MIN 35086 Units 200 From Vendor A

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