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. A company will begin stocking remote control devices. Expected monthly demand is 800 units. The

controllers can be purchased from either supplier A or supplier B. Their price lists are as follows:


Quantity Unit Price Quantity Unit Price

1–199 $14.00 1–149 $14.10

200–499 13.80 150–349 13.90

500+ 13.60 350+ 13.70

Ordering cost is $40 and annual holding cost is 25 percent of unit price per unit. 


Which supplier

should be used and what order quantity is optimal if the intent is to minimize total annual costs?