Question: Two different suppliers have quoted different unit prices and payment windows for a commodity part used by an industrial company. The purchasing manager for the
Two different suppliers have quoted different unit prices and payment windows for a commodity part used by an industrial company. The purchasing manager for the part will decide on which supplier to use based on a price analysis that adjusts for the difference in the payment windows, thereby reflecting the opportunity cost of making earlier payments. The relevant information is as follows:
If the annual cost of capital for the company is which supplier is offering the better price given the opportunity cost required by making a payment earlier if Supplier A is chosen?
The effective cost of purchasing from Supplier A is $ per unit. Enter your response rounded to two decimal places. is a better supplier in terms of price.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
