Supplier Comparison Analysis

MGMT$413$A $-$ Supply Chain Management

Homework Problem

Example $1$

Glven the following information, use total cost analysis to determine which supplier is more cost$-$effective.

The buyer needs to recelve the product within $25$ days from when they place the order.

$\backslash$table$[[$Monthly usage,,$3000$ units$],[$Order Frequency,every,$],[$Order Processing Cost,$$,95$ dollars$],[$Inventory Carrying Cost,,$30\%$ annually$],[$Weight per Unit,$40$ pounds,$],[$Volume per unit,$8$ cubic feet,$],[$Cost of working capital,$10\%$ annually,$]]$

Purchase Cost $-$ Volume Dependent:

$\backslash$table$[[$Freight Company "USF Freight" Rates:,Distance,Distance$],[$Freight Costs,$1$ to $500$ miles,$500$ miles to $1000$ miles$],[$Air Freight $-$ Cost per Pound per $100$ miles,$$0\mathrm{.}320,$$$0\mathrm{.}290$