The estimated demand is $2,500$ units$/$month$.$ Both suppliers will incur some costs to re$-$program the software for this optical module. The optical modules will be prepackaged in a plastic clamshell tray holding $10$ optical modules each.

Each packaged tray weighs approximately $1$ pound.

Quote $1$:

Unit price $=$$$26$

Production lead time $=16$ weeks

Packing costs $=$$$4\mathrm{.}50$ per tray

Cost of delivery : $$28$ per $10$ pounds Software Programming $=$$$4,500$ one$-$time fixed charge

Quote:$2$

Unit price $=$$$15\mathrm{.}00$

Production lead time $=4$ weeks

Shipping lead time $=$ Eight weeks

Software Programming $=$$$2,000$ one$-$time fixed charge

In addition to this overseas supplier's quote, you must consider additional costs and information before preparing

a comparison of the second supplier's quotation:Each monthly shipment requires two containers.

Packing costs per tray $=$$$3\mathrm{.}50$

Cost of inland transportation to the port of export $=$ $$275$ per container.

Freight forwarder's fee $=$$$100$ per monthly shipment $($letter of credit, documentation, etc.$).$

Cost of ocean transport $=$$$4,000$ per container.

Marine insurance $=$$$0\mathrm{.}76$ per unit.

U$.$S$.$ port handling charges $=$$$1,150$ per container.

Customs duty $=5\%$ of unit cost.

Customs broker fees per monthly shipment $=$$$150.$

Transportation from Seattle to Northern California $=$$$32\mathrm{.}00$ per ten pounds.

Need to warehouse one month of inventory in Northern California at a fixed warehousing cost of

$$100\mathrm{.}00$ per cubic foot per year, to compensate for lead time uncertainty.

At least two five$-$day visits per year to travel to Malaysia to meet with the supplier and provide

updates on performance and shipping $=$$$10,000$ per year $($estimated$)$Case Questions

Calculate the total cost per unit $($annual$)$of Quote$1$

Calculate the total cost per unit$($annual$)$ of purchasing from Quote $2$