Question: The Red Lobster (RL) restaurant chain has been using two seafood vendors for lobster: Cape Cod Fisheries (CCF) and Maines Best. Lobsters from CCF averaged
The Red Lobster (RL) restaurant chain has been using two seafood vendors for lobster: Cape Cod Fisheries (CCF) and Maines Best. Lobsters from CCF averaged $2.20/pound last year while Maines Best averaged $3.33/lb. While quality has been good from both vendors, CCF continually delivers late and RL has to pay the dock employees overtime to accept deliveries. Last years overtime costs were $50,000. RL purchased a total of 100,000 lbs. last year from CCF. CCF is now having quality issues and RL had to discard several hundred lobsters. This increased nonperformance costs and the SPI for CCF is now at 1.45. What is the true cost for lobsters sourced from CCF?
A.) Not enough info available
B.) $3.19/lb
C.) $3.65/lb
D.) Same as Maines Best at $3.33/lb
E.) $2.20/lb
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