Black Sheep Industries has gone out on a bid for aa regular component. Expected

Question: Black Sheep Industries has gone out on a bid for aa regular component. Expected demand is 700 units per month. The item can be purchased from either Smith Manufacturing or Avaza Manufacturing. Their price lists are shown below. Ordering costs are R50, and annual holding cost per unit is 10%.Assume a 12 month work year. Smith Manufacturing Quantity UnitBlack Sheep Industries has gone out on a bid for aa regular component. Expected demand is 700 units per month. The item can be purchased from either Smith Manufacturing or Avaza Manufacturing. Their price lists are shown below. Ordering costs are R50, and annual holding cost per unit is 10%.Assume a 12 month work year.
Smith Manufacturing Quantity Unit Price 1-499 R16.00 500-999 R15.50 1000 R15.00
Avaza Manufacturing Quantity Unit Price 1-399 R16.10 400-799 R15.60 800 R15.10
1. The EOQ 1 for Smith Manufacturing in units 2.The EOQ 2 for Smith Manufacturing in units 3.The EOQ 3 for Smith Manufacturing in units 4.The value for Q1 for Smith Manufacturing in units 5.The value for Q2 for Smith Manufacturing in units 6.The value for Q3 for Smith Manufacturing in units 7.The Total Cost Value Discount Quantity 1 for Smith Manufacturing is 8.The Total Cost Value Discount Quantity 2 for Smith Manufacturing is 9.The Total Cost Value Discount Quantity 3 for Smith Manufacturing is
10. The EOQ 1 for Avaza Manufacturing in units 11.The EOQ 2 for Avaza Manufacturing in units 12.The EOQ 3 for Avaza Manufacturing in units 13.The value for Q1 for Avaza Manufacturing in units 14.The value for Q2 for Avaza Manufacturing in units 15.The value for Q3 for Avaza Manufacturing in units 16.The Total Cost Value Discount Quantity 1 for Avaza Manufacturing is 17.The Total Cost Value Discount Quantity 2 for Avaza Manufacturing is 18.The Total Cost Value Discount Quantity 3 for Avaza Manufacturing is
100% (3 ratings)) Annual demand = 700*12 = 8400 EOQ = sqrt((2*annual demand*ordering cost)/holding cost per unit per year) = sqrt((2*8400*50)/4) = 458.2575695 b) With Allen Mfg, Order quantity 1-499, Total cost = inventory holding cost ordering cost purchase cos…View the full answer