Question

Emery Pharmaceutical uses an unstable chemical compound that must be

kept in an environment where both temperature and humidity can be controlled.

Emery uses 200 pounds per month of the chemical, estimates the holding cost to be

£3.33 (because of spoilage), and estimates order costs to be £10 per order. The cost

schedules of two suppliers are as follows:

Vendor 1 Vendor 2 Quantity Price/LB (£) Quantity Price/LB (£) 1-49 35.00 1-74 34.75 50-74 34.75 75-149 34.00 75-149 33.55 150-299 32.80 150-299 32.35 300-499 31.60 300-499 31.15 500+ 30.50

500+ 30.75

Vendor 3 Vendor 4 Quantity Price/LB (£) Quantity Price/LB (£) 1-99 34.50 1-199 34.25 100-199 33.75 200-399 33.00 200-399 32.50 400+ 31.00

400+ 31.10

a) What quantity should be ordered, and which supplier should be used?

b) Discuss factor(s) should be considered besides total cost.

Please with explanations

Answer 1

VENDOR ::: 1

VENDOR ::: 2

VENDOR ::: 3

VENDOR ::: 4