What is the economic order quantity

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Reference no: EM132291476

Organix is a health supplements retailer. Every year, Organix sells 1000 lbs of powdered wheatgrass. They have two suppliers: Altera Foods, which charges $15 per pound and Bristol Farms, which charges only $14.50 per pound. Although ordering products online is costless for both suppliers, there is another difference. Bristol ships only form their Connecticut farm and it costs Organix $250 per order. Altera has local distributors who can ship to Organix for $50 per order. The holding cost - for both purchased and manufactured wheatgrass powder - is estimated to be about 10% of purchase price per year.

1. What is the Economic Order Quantity if Organix buys only from Altera?

2. What is the EOQ if Organix buys only from Bristol?

3. Which of the suppliers should Organix choose? Why?

Reference no: EM132291476

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