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Abigail's Auto Repair uses 500 oil filters every month. Abigail has just taken a course in supply chain management, and as a result has solicited two new suppliers for these packs, with the following price structures:
Supplier A
Supplier B
Quantity
Unit Price
1-299
$9.00
$9.50
300-599
8.00
300-449
8.50
600+
7.00
450+
Using either supplier, Abigail pays $20 to place an order, and annual holding cost is 20% of purchase price. Which supplier should be chosen, at what order quantity? What will be the total cost? Support your recommendation with numerical analysis.
Remember to show your calculations in order to receive full credit!
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