$14.$ Given the following information, use total cost analysis to determine which supplier is more cost$-$effective. Late delivery of raw materials results in $60$ percent lost sales and $40$ percent back orders of finished goods.

Order lot size $1,000$

Requirements $($annual forecast$)120,000$ units

Weight per engine $22$ pounds

Order processing cost $$125/$order

Inventory carrying rate $20\%$ per year

Cost of working capital $10\%$ per year

Profit margin $15\%$

Price of finished goods $$4,500$

Back$-$order cost $$15$ per unit

Unit Price Supplier $1$ Supplier $2$

$1$ to $999$ units$/$order $$50\mathrm{.}00$ $$49\mathrm{.}50$

$1000$ to $2,999$ units$/$order $$49\mathrm{.}00$ $$48\mathrm{.}50$

$3,000+$ units$/$order $$48\mathrm{.}00$ $$48\mathrm{.}00$

Tooling cost $$12,000$ $$10,000$

Terms $2/10,$ net $301/10,$ net $30$

Distance $125$ miles $100$ miles

Supplier Quality Rating $2\%2\%$

Supplier Delivery Rating $1\%2\%$

Truckload $($TL $>=40,000$ lbs$)$: $$0\mathrm{.}85$ per ton$-$mile

Less$-$than$-$truckload $($LTL$)$: $$1\mathrm{.}10$ per ton$-$mile

Note: per ton$-$mile $=2,000$ lbs per mile; number of days per year $=365$