Feels Like 98 has is deciding between two suppliers (A and B) for purchasing bags of barley. The brewery has forecasted that it will require 16,000 bags of barley each year. Demand is relatively constant through the year and the company estimates that it costs $25 for it to place an order with a supplier. Feels Like 98's accountant (Sara) has also calculated that it should use a holding cost that is 20% of the cost of a bag of barley. The two suppliers have given the brewery's supplier relationship coordinator (Ted) a price schedule for bags of barley. Use the information above and price schedules below to complete questions 1 through 3 below

Feels Like 98 has is deciding between two suppliers (A and B) for purchasing bags of barley. The brewery has forecasted that it will require 16,000 bags of barley each year. Demand is relatively constant through the year and the company estimates that it costs $25 for it to place an order with a supplier. Feels Like 98's accountant (Sara) has also calculated that it should use a holding cost that is 20% of the cost of a bag of barley. The two suppliers have given the brewery's supplier relationship coordinator (Ted) a price schedule for bags of barley. Use the information above and price schedules below to complete questions 1 through 3 below

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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Question

Need a and b

a. What is the minimum TAIC for supplier B?

b. What order quantity would minimize the TAIC for Feel Like 98?

Feels Like 98 has is deciding between two suppliers (A and B) for purchasing bags of barley. The
brewery has forecasted that it will require 16,000 bags of barley each year. Demand is relatively
constant through the year and the company estimates that it costs $25 for it to place an order with a
supplier. Feels Like 98's accountant (Sara) has also calculated that it should use a holding cost that is
20% of the cost of a bag of barley. The two suppliers have given the brewery's supplier relationship
coordinator (Ted) a price schedule for bags of barley. Use the information above and price schedules
below to complete questions 1 through 3 below
Supplier A
Quantity Ordered
1 - 199
200 - 499
500 or more
Price per Bag of
Barley
$38.40
$35.80
$34.70
Supplier B
Quantity Ordered
1 - 299
300 - 999
1,000 or more
Price per Bag of
Barley
$39.50
$35.40
$34.60

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