Question: I need help with B - 1 ! ! ! ! Your company assembles five different models of a motor scooter that is sold in
I need help with B
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 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 quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:
Requirements annual forecast units
Weight per engine
Order processing cost $ $ per order
Inventory carry cost percent of the average value of inventory per year
Note: Assume that half of lot size is in inventory on average units
Two qualified suppliers have submitted the following quotations:
Your assistant has obtained the following freight rates from your carrier:
Truckload lbs each load: $ per tonmile
Lessthantruckload: $ per tonmile
Note: Per tonmile lbs per mile.
a Calculate the total cost for each supplier. Round your answers to the nearest whole number.
a Which supplier would you select?
Supplier
Supplier
b If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier. Do not round
intermediate calculations. Round "Required lot size for truckload" and final answers to the nearest whole number.
HINT: Use full truckload cost rates and the lowest feasible unit cost for all calculations. For example, if there are orders per year,
don't split the orders into full truckloads and lessthantruckloads use the full truckload rate for all orders. For annual
purchase cost, don't use two different unit costs for the complete orders and the partial orders use the lowest feasible unit
cost for all purchase orders based on the lot size needed for a full truckload.
b Would your supplier selection change?
Yes
No
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