M.P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 725 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing.

M.P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 725 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table Ordering cost is $55, and annual holding cost per unit is $4

 

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M.P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 725 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing.
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Allen Mfg. Baker Mfg.
Quantity Unit Price Quantity Unit Price
1-499 $16.00 1-399 $16.10
500-999 15.50 400-799 15.60
1000+ 15.00 800+ 15.10

a) What is the economic order quantity if price is not a consideration?

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b) Which supplier, based on all options with regard to discounts, should be used?

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