1 What is the total and unit cost structure for each of the suppliers?Who is lowest & highest cost?What would you guess to be the key cost drivers?

2 What is the capacity and utilization for each supplier? - Lowest & highest utilization?

3 How would the unit costs change if each supplier ran at capacity (I.e. 100% utilization)?Hint: figure out fixed and variable costs; Unit cost = VC + (FC / Volume)Now who is lowest & highest cost?

4 Why does Supplier C have the higher direct laborcost per unit than Supplier D even thoughSupplier Cs direct laborwage + fringe is lower?

5 Given what you have learned from the above, who is the lowest cost supplier and what sourcingstrategy might you consider?