Requirements (annual forecast) Weight per engine Order processing cost Inventory carry cost 16,600 units 30 pounds $ 180 per order 20 percent of the average value of inventory per year Note: Assume that half of lot size is in inventory on average (1,400/2 = 700 units). Two qualified suppliers have submitted the following quotations: ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000 units/order Tooling costs Distance SUPPLIER 1 SUPPLIER 2 UNIT PRICE UNIT PRICE $ 478 $ 480 480 485 480 475 $30,000 $26,500 120 miles 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (53,500 lbs. each load): Less-than-truckload: Note: Per ton-mile = 2,000 lbs. per mile. $0.80 per ton-mile $1.20 per ton-mile