TABLE DATA FOR SUPPLIERS TO EIGHT FLAGS Annual Freight Costs Shipping Quantity Supplier 5,000 10,000 15,000 Price/Unit Annual Holding Cost/Unit Lead Time (wks) Annual Administrative Cost Sharps $5,000 $2,600 $2,000 $4.00 $0.80 $4,000 Winkler $5,500 $3,200 $2,900 $3.80 $0.76 6 $5,000

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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Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks. Eight Flags needs 30,000 gallons of oil annually; the parks operate 50 weeks a year. Management is unsatisfied with the current supplier of oil and has obtained two bids from other suppliers. The data are contained in Table. Which supplier and which shipping quantity will provide the lowest costs for Eight Flags?

TABLE
DATA FOR SUPPLIERS TO EIGHT FLAGS
Annual Freight Costs
Shipping Quantity
Supplier
5,000
10,000
15,000
Price/Unit
Annual Holding Cost/Unit
Lead Time (wks)
Annual Administrative Cost
Sharps
$5,000
$2,600
$2,000
$4.00
$0.80
$4,000
Winkler
$5,500
$3,200
$2,900
$3.80
$0.76
6
$5,000
Transcribed Image Text:TABLE DATA FOR SUPPLIERS TO EIGHT FLAGS Annual Freight Costs Shipping Quantity Supplier 5,000 10,000 15,000 Price/Unit Annual Holding Cost/Unit Lead Time (wks) Annual Administrative Cost Sharps $5,000 $2,600 $2,000 $4.00 $0.80 $4,000 Winkler $5,500 $3,200 $2,900 $3.80 $0.76 6 $5,000
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