# TMC Excel Question

17. The owner of a diner has summarized the price lists from four potential vendors (see the  following table) who want to supply her with cooking oil.  Monthly usage is 300 gallons, ordering cost is \$10 per order, and the monthly carrying cost is \$ .50 a gallon.

Which vendor should she use, and what order quantity is best if she wants to minimize total annual costs (TMC).

VENDOR W        VENDOR X           VENDOR Y        VENDOR Z

Quantity  Price   Quantity  Price   Quantity  Price   Quantity  Price

1-99           \$25      1-79       \$25        1-25        \$27        1-59       \$26

100-399      24       80-139     24        26-89        25        60-139     25

400+           22       140-299    23       90-199      24       140-249    24

300+         22        200+        23        250+        23

Since demand and carrying costs are both expressed on a monthly basis, you will need to multiply these values by 12 to put into annual terms. You will be using an EXCEL template that has already been created for quantity discount inventory problems and can be found at Stevenson’s online learning center atwww.mhhe.com/stevenson11eALL 8 OUTPUT PAGES MUST BE INCLUDED IN ANSWER!