Problem $16-12($Algo$)$

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 $1,150$ 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:

Note: Assume that half of lot size is in inventory on average units$).$

Two qualified suppliers have submitted the following quotations:

Your assistant has obtalned the following freight rates from your carrler:

Note: Per ton$-$mile $=2,000lbs.$ per mile.

a$-1.$ Calculate the total cost for each supplier. $($Round your answers to the nearest whole number.$)$

Answer is complete but not entirely correct.

a$-2$ Which supplier would you select?

Supplier $20$

Supplier $1$

b$-1.$ If you could move the lot slze up to ship in truckload quantitles, calculate the total cost for each supplier. $($Do not round

intermediate calculations. Round "Required lot slze for truckload" and final answers to the nearest whole number.$)$

HINT: Use $($full$)$ truckload cost rates and the lowest $($feasible$)$ unlt cost for all calculatlons. For example, If there are $8\mathrm{.}3$ orders per year,

don't split the $8\mathrm{.}3$ orders into $8$ full truckloads and $0\mathrm{.}3$ less$-$than$-$truckloads $-$ use the full truckload rate for all $8\mathrm{.}3$ orders. For annual

purchase cost, don't use two different unit costs for the $8$ complete orders and the $0\mathrm{.}3$ partlal orders $-$ use the lowest $($feaslble$)$ unit

cost for all $8\mathrm{.}3$ purchase orders based on the lot size needed for a full truckload.