What is the annual ordering and inventory carrying costs

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Wilson industries sources from multiple suppliers and is considering the aggregation of inbound shipments to lower its costs. Truck load shipments costs $500 per truck along with $100 per pickup. Average annual demand from each supplier is 10,000 units. Each unit costs $50 and Wilson incurs a cost of 20%.

What is the optimal order frequency and order lot size if Wilson decides to aggregate 4 suppliers per truck? What is the annual ordering and inventory carrying costs for Wilson? (You do not need to compute the material cost).

Reference no: EM131028783

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