Please see attached document outlining the case study. Your specific assignment begins on Page 5.

Case study is due by COB on February 13th to my e-mail and is worth 18 points. Please e-mail me your work.

Please submit two documents with your submission:

1. MS Word or PDF responding to the disucssion questions.

2. MS Excel spreadhseet showing your analysis to determine whether the product is most profitable to make or buy

This isn't an accounting or finance class. I don't expect that you will get everything just right from the standpoint of the numbers.

The purposes of this exercise are:

1. To demonstrate some of the scenarios that you will face as a Purchasing professional.

2. To understand and evaluate your thought processes and logic, including some of the "what ifs" that arent necessarily given.

THESE ARE THE QUESTIONS TO BE ANSWERED INDIVIDUALLY:

1. Which ownership option is most advantageous for the company Purchase outright or lease?

2. Which installation option is most advantageous for the company company installed, or supplier installed?

3. Which maintenance agreement is advantageous one-time up-front agreement or paid quarterly?

4. Based on your recommendations above, calculate the total cost of ownership based upon your proposal.

If you could include number calculations to show the advantage of one or the other, that would be amazing!!

7:36 4 LTE f Total Cost of Ownership- Personal Co... Your Assignment Purchasing manager Meg Tilley is considering the purchase of 300 shipping label printers for the ten manufacturing plants that comprise her company The amortized life of the printers is 5 years and the company's cost of capital is 10% The target supplier offers a purchase outright or a lease option. The lease may be cancelled given a 60-day notice The target supplier offers a one-year factory warranty covering parts and onsite service, supplier For the initial purchase of the printers, the supplier will invoice one time and if extended service is requested the supplier will invoice quarterly. Installation may be done by the supplier or by in-house maintenance personnel However, the equipment warranty gives several exclusions if the equipment is installed by technicians other than certified supplier technicians. Based on the below scenario. Answer the following questions: 1. Which ownership option is most advantageous for the company - Purchase outright or lease? 2. Which installation option is most advantageous for the company - company installed, or supplier installed? 3. Which maintenance agreement is advantageous - one-time up-front agreement or paid quarterly? 4. Based on your recommendations above, calculate the total cost of ownership based upon your proposal. 7:36 7 LTE f Total Cost of Ownership- Personal Co... ... Cost Elments Cost Measures Supplier quote: $6,500 per printer purchased up front or $100 per printer per month Equipment Costs: Maintenance agreement year one: NA Maintenance agreement year two Supplier quote: S200 per printer Maintenance agreement years 3-3: Supplier quote: $250 per printer per year . One time up-up front maintenance agreement included in the purchase cost Supplier quote: Printer cost increases by S250 of the printer covering years 2-7: per printer Acquisition Cout Purchasing costs: One capital buyer and one purchasing manager for one month. Purchasing Manager annual salary: $110,000 per year. Capital buyer $80,000 per year. 30 maintenance technicians making $35 per hour for 30 hours cach - Installation costs Fringe benefit costs: Estimated at base 22% of buse salary Administration 1 PO @ S150, 12 invoices @ 540 each Extended service agreements will be invoiced quarterly Usage Costs: Installation if done by supplier: $25,000 flat fee End of Life: Salvage Value s8 per printer 4