Assignment task: Whole Health is a wellness supplements retailer. Every year, Whole Health sells 1000 Ibs of powdered wheatgrass. They have two suppliers: Green Foods, which charges $25 per pound and Organix Farms, which charges only $22.50 per pound. Although ordering products online is costless for both suppliers, there is another difference. Organix ships only from their Connecticut farm and it costs Whole Health $275 per order. Green Foods has local distributors who can ship to Whole Health for only $50 per order. The holding cost - for both purchased and manufactured wheatgrass powder - is estimated to be about 10% of purchase price per year.
Q1. What is the economic order quantity (EOQ) IF Whole Health buys only from Green Foods?
Q2. What is the EOQ if Whole Health buys only from Organix?
Q3. Which of the suppliers should Whole Health choose? Why?