Answered: A company can purchase component H from…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A company can purchase component H from 3 potential suppliers. Supplier A charges a fee of $5.50 per component. Supplier B charges $1500 per order plus $2.00 per component ordered. Supplier C charges $4.00 per component, and requires the buyer
to pay for at least 280 components (even if the order size is less than 280).

ANSWER THE FOLLOWING QUESTIONS:

4) What is the full range of order sizes where each supplier is optimal?
5) The company decided to buy 300 units of component H from supplier A. How much money could the company have saved if it purchased the 300 units from supplier C instead of supplier A?
6) Next week supplier B will be running a 10% off special. If the company needs to purchase 600 units of component H during the special, which supplier should be chosen?

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