Refer to the data in Exercise 10-36.

Required
a. Assume all else remains the same. What bid by Tappan would make Kinnear indifferent between buying from Tappan or Hill?
b. Why, given the information, do you think Kinnear continues to buy plastic from Hill?

Data From Exercise 10-36:

Kinnear Plastics manufactures various components for the aircraft and marine industry. Kinnear buys plastic from two vendors: Tappan Corporation and Hill Enterprises. Kinnear chooses the vendor based on price. Once the plastic is received, it is inspected to ensure that it is suitable for production. Plastic that is deemed unsuitable is disposed of.

The controller at Kinnear collected the following information on purchases for the past year:

                            

The purchasing manager has just received bids on an order for 150 tons of plastic from both Tappan and Hill. Tappan bid $1,482 and Hill bid $1,463 per ton.