Compute the number of orders per year

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A manager of a car wash has received a price list from two suppliers of the liquid soap. She knows the annual usage of soap is 4,250 liters. The car wash is open 360 days a year. The ordering cost is $10 and holding cost rate is 30 percentage of unit cost

Supplier A Supplier B

Quantity Unit Price Quantity Unit Price

1 - 499 $6.00 1 - 399 $6.10

500 - 999 $5.50 400 - 799 $5.60

1000 and more 5.00 800 and more $5.10

a) What is the economic order quantity (EOQ) of each supplier?

b) Which supplier should be used? Why?

c) Compute the number of orders per year and time between orders for each supplier according to their EOQ in part

Reference no: EM132741343

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