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Business, 15.02.2021 22:10 antojustice

arings per week from a local supplier who charges $1.00 per bearing. The purchasingmanager has identified another potential source willing to supply the bearings at $0.97 perbearing. Before making his decision, the purchasing manager evaluates the performance of thetwo suppliers. The local supplier has an average lead time of two weeks and has agreed to deliverthe bearings in batches of 2,000. Based on past on-time performance, the purchasing managerestimates that the lead time has a standard deviation of one week. The new source has an averagelead time of six weeks with a standard deviation of four weeks. The new source requires aminimum batch size of 8,000 bearings. Which supplier should the purchasing manager go with(ignore ordering cost and focus on material cost and holding cost when making your decision)

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