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What order quantity is optimal

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Question - A purchasing manager of a sports store wants to begin stocking hockey jerseys. Expected monthly demand is 800 jerseys. The jerseys can be purchased from either supplier A or supplier B. Their prices lists are as follows:

Supplier A

Supplier B

Quantity

Unit Price

Quantity

Unit Price

1-199

$14.00

1-149

$14.10

200-499

$13.80

150-349

$13.90

500+

$13.60

350+

$13.70

Ordering cost is $40 per order and annual holding cost is 25 percent of unit price. Which supplier should be used and what order quantity is optimal?

Reference no: EM133150376

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