how did they get W? please explain

supplier for engines for your chain saw. The quotes is as follows: New Supplier Price per engine $100 Terms 2% 10 Net 75 Distance 2000 Order quantity 4000 Weight 5 lbs Assume the following: Annual volume for engines is expected to be 250,000 units The price is constant regardless of volume or order quantity Inventory holding costs are 20% Working capital costs are 10% Your freight rate is $1.5 per ton mile for a full truckload (40,000 lbs) and $2 for a less- than-truckload shipment There are 360 days in a year. Assume order costs, tooling costs, quality costs, on-time delivery costs are the same for both suppliers and hence can be ignored. Part 1 - 20 points: If your current supplier's total cost is $25,000,000, should you switch to the new supplier (Show all your work.) 3 APC=CR=$100 x 250,00 units - $25,000 4000 . 9 = 3 $40,00 F = D.W.R LTL rate applies. $2,500,000 2000 lbs/ton) $25m x 10% x 75 $520,833 360 2% 10 = $25m x 10% x 10 oo % 3 so do not switch Part 2 - 10 points. The new supplier long term 2 Www - AHC- QKC = voce (20c)(00) Each shipment weighs 20,000 lbs (4000/shipment & 5 los) x so (52) (2000 miles) x(250,000 x 5 $( Terms: Net 75 + $25Mx 2% - 569,444 take discount Total = $25m +40,000 + $2.5M - $569,444 = $26,970,556 { 360 supplier for engines for your chain saw. The quotes is as follows: New Supplier Price per engine $100 Terms 2% 10 Net 75 Distance 2000 Order quantity 4000 Weight 5 lbs Assume the following: Annual volume for engines is expected to be 250,000 units The price is constant regardless of volume or order quantity Inventory holding costs are 20% Working capital costs are 10% Your freight rate is $1.5 per ton mile for a full truckload (40,000 lbs) and $2 for a less- than-truckload shipment There are 360 days in a year. Assume order costs, tooling costs, quality costs, on-time delivery costs are the same for both suppliers and hence can be ignored. Part 1 - 20 points: If your current supplier's total cost is $25,000,000, should you switch to the new supplier (Show all your work.) 3 APC=CR=$100 x 250,00 units - $25,000 4000 . 9 = 3 $40,00 F = D.W.R LTL rate applies. $2,500,000 2000 lbs/ton) $25m x 10% x 75 $520,833 360 2% 10 = $25m x 10% x 10 oo % 3 so do not switch Part 2 - 10 points. The new supplier long term 2 Www - AHC- QKC = voce (20c)(00) Each shipment weighs 20,000 lbs (4000/shipment & 5 los) x so (52) (2000 miles) x(250,000 x 5 $( Terms: Net 75 + $25Mx 2% - 569,444 take discount Total = $25m +40,000 + $2.5M - $569,444 = $26,970,556 { 360