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Part 1
Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda’s request, all bids are for a shipping quantity (Q) of 20,000 bottles with annual requirements (D) of 40,000 units. Wanda’s factory operates 250 days a year.
The following table shows each supplier’s price, estimated annual freight costs, and current lead times; management has added estimates for holding costs and administrative oversight costs for each supplier.
Supplier Bids
Supplier
Freight Costs (annual)
Price Unit (p)
Annual Holding Cost Unit (H)
Lead Time (L) (days)
Annual Administrative Costs
Dover Plastics
$4,500
$5.15
$1.03
14
$4,000
Evan & Sons
$3,500
$5.00
$1.00
13
$5,000
Farley, Inc.
$3,000
$5.05
$1.01
17
$6,000
Part 2a
Which of the three suppliers will provide the lowest annual cost to Wanda Lux?
Using Evan is the lowest cost alternative, with annual total costs to Wanda Lux of $218,500. (Enter your response rounded to the nearest whole number.)
Part 3
Beyond costs, however, Wanda has three other criteria considered important in the selection of a supplier. The following table shows all the criteria, their weights, and the scores for all of them except total costs, where a score of 1.0 indicates
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