B D F G H Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,160 units. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained 3 quotes from two reliable engine suppliers and you need to decide which to use. The following data have been 4 5 6 Requirements (annual forecast) 13,920 units 7 Weight per engine 25 pounds 8 Order processing cost $ 120 per order 9 Inventory carry cost 20 percent of the average value of inventory per year 10 11 Note: Assume that half of lot size is in inventory on average (1.150/2 = 580 units). 12 13 Two qualified suppliers have submitted the following quotations: 14 15 SUPPLIER 1 SUPPLIER 2 16 ORDER QUANTITY UNIT PRICE UNIT PRICE 17 1 to 1,499 units/order S 537 $ 536 18 1,500 to 2,999 units/order 535 536 19 3,000+ units/order 534 530 20 Tooling costs $ 32.360 $ 29,200 21 Distance 135 miles 100 miles 22 Question Solution Type here to search O . Note: Assume that half of lot size is in inventory on average (1,160/2 = 580 units). Two qualified suppliers have submitted the following quotations: SUPPLIER 2 UNIT PRICE $ 536 536 530 $ 29,200 100 miles SUPPLIER 1 ORDER QUANTITY UNIT PRICE 1 to 1,499 units/order $ 537 3 1,500 to 2,999 units/order 535 e 3,000+ units/order 534 0 Tooling costs $ 32,860 21 Distance 135 miles 22 23. Your assistant has obtained the following freight rates from your carrier: Truckload (48,000 lbs. each load): 24 $0.80 per ton-mile 25 Less-than-truckload: $1.20 per ton-mile 26 27 Note: Per ton-mile = 2,000 lbs.per mile 28 29 1. Calculate the total cost for each supplier. 30 2. Which supplier would you select? 31 32 33 34 BE Question Solution a Type here to search