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Name: A company needs to choose one supplier for a particular type of silico
Uploaded: 2024-03-20T07:07:26.000Z
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Description: A company needs to choose one supplier for a particular type of silicon wafer used in the production of semiconductors. The company has three options. Supplier A sells the silicon wafers for $2.40 per wafer, independently of the number of wafers orde

Intermediate Algebra

19th Edition

ISBN:9780998625720

Author:Lynn Marecek

Publisher:Lynn Marecek

Chapter12: Sequences, Series And Binomial Theorem

Section12.3: Geometric Sequences And Series

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A company needs to choose one supplier for a particular type of silicon wafer used in the production of semiconductors. The company has three options. Supplier A sells the silicon wafers for $2.40 per wafer, independently of the number of wafers ordered. Supplier B sells the wafers for $2.20 each but does not consider an order for less than 2,000 wafers. Supplier C sells the wafers for $2.00 each but does not accept an order for less than 3,000 wafers. Assume an order setup cost of $200 and an annual requirement of 10,000 wafers. Assume a 20% annual interest rate for holding cost calculations.

Which supplier should be chosen to minimize the total annual cost for the wafers, and what is the optimal order quantity?
If the replenishment lead time for wafers is three months, determine the reorder point based on the on-hand level of inventory of wafers.

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