Question: Given the following information, use total cost analysis to determine which supplier is more cost-effective. Late delivery of raw material results in 55% lost sales

Given the following information, use total cost

Given the following information, use total cost analysis to determine which supplier is more cost-effective. Late delivery of raw material results in 55% lost sales and 45% back orders of finished goods. Order size Requirements (annual forecast) Weight per unit Order processing cost Inventory carrying cost Cost of working capital Profit margin Price of finished goods Back order cost Unit Price 1 to 999 units/order. 3,000 units and over/order Tooling cost Terms Distance 2,000 50,000 units 25 pounds $1,000 per order 15% per year 10% per year 1,000 to 2,999 units/order $39.00 2% 20% $250 Supplier 1 1% $20 per unit $40.00 $38.25 $15,000 2/10, net 30 200 miles Supplier 2 $39.50 $38.60 $38.25 $20,000 1/10, net 30 250 miles Supplier Quality Rating Supplier Delivery Rating Truckload (TL>= 40,000 lbs): $1.85 per ton-mile; Less-than-truckload (LTL): $2.50 per ton-mile Note: per ton-mile = 2,000 lbs per mile: Number of days per year = 365 What are the total costs of Suppler 1 and Supplier 2? (Use the whole dollar values in the final answer) 2% 2%

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