Problem 13-12 (Algo) 1 Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. points 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 eBook warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,400 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 30 Refere collected: Requirements (annual forecast) Weight per engine Order 16,800 units 30 pounds processing $ 235 per order cost percent of the 20 average value of inventory Inventory carry cost per year Note: Assume that half of the lot size is in inventory, on average (1,400/2 700 units) Two qualified suppliers have submitted the following quotations: SUPPLIER SUPPLIER 1 2 ORDER UNIT UNIT QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000 units/order Tooling PRICE PRICE $ 532 $ 528 522 525 512 508 $28,640 $26,400 costs 125 miles 100 miles Distance Your assistant has obtained the following freight rates from your carrier 1 Your assistant has obtained the following freight rates from your carrier 30 points $0.80 Truckload per ton- eBook (46,000 lb. each load): mile $1.20 Refere Less-than- truckload : per ton- mile Note: Per ton-mile 2,000 Ib. per mile. a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) SuppliBuppli 1 Total a-2. Which supplier would you select? Supplier 2 Supplier 1 b-1. 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 8.3 orders per year, don't split the 8.3 orders into 8 full truckloads and 0.3 less-than-truckloads - use the full truckload rate for all 8.3 orders. For annual purchase cost, don't use two different unit costs for the 8 complete orders and the 0.3 partial orders - use the lowest (feasible) unit cost for all 8.3 purchase orders based on the lot size needed for a full truckload. SuppliBuppli 2 Total b-2. Would your supplier selection change? Yes No Problem 13-12 (Algo) 1 Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. points 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 eBook warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,400 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 30 Refere collected: Requirements (annual forecast) Weight per engine Order 16,800 units 30 pounds processing $ 235 per order cost percent of the 20 average value of inventory Inventory carry cost per year Note: Assume that half of the lot size is in inventory, on average (1,400/2 700 units) Two qualified suppliers have submitted the following quotations: SUPPLIER SUPPLIER 1 2 ORDER UNIT UNIT QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000 units/order Tooling PRICE PRICE $ 532 $ 528 522 525 512 508 $28,640 $26,400 costs 125 miles 100 miles Distance Your assistant has obtained the following freight rates from your carrier 1 Your assistant has obtained the following freight rates from your carrier 30 points $0.80 Truckload per ton- eBook (46,000 lb. each load): mile $1.20 Refere Less-than- truckload : per ton- mile Note: Per ton-mile 2,000 Ib. per mile. a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) SuppliBuppli 1 Total a-2. Which supplier would you select? Supplier 2 Supplier 1 b-1. 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 8.3 orders per year, don't split the 8.3 orders into 8 full truckloads and 0.3 less-than-truckloads - use the full truckload rate for all 8.3 orders. For annual purchase cost, don't use two different unit costs for the 8 complete orders and the 0.3 partial orders - use the lowest (feasible) unit cost for all 8.3 purchase orders based on the lot size needed for a full truckload. SuppliBuppli 2 Total b-2. Would your supplier selection change? Yes No