You are the new purchasing manager for Frich Turbo Engine Company. Frich makes engines that use...

 

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You are the new purchasing manager for Frich Turbo Engine Company. Frich makes engines that use a forced induction device to increase airflow to the engine combustion chamber. This forced induction, created through the use of turbines, means more air - and more fuel-moves through the combustion chamber as compared to simple atmospheric pressure intake alone. As a result, Frich's turbo engines yield a high level of performance for customers. Last year, Frich requested bids for valves that go into the assemblies of the company's engines. Valves are considered Leverage items, since quality is important, but there are many suppliers for these items. Frich received the following bids from three suppliers: Last Year's Quotes: Materials Direct Labor Overhead Factory Cost SGA Total Cost Profit Product Price Tooling Selling Price | Bayfleet Union $ 0.414 $ 0.380 $ 0.288 $ 0.400 $ 0.317 110% $0.300 $ 1.019 $ 0.102 $ 1.121 $ 0.134 $ 1.255 $ 0.104 $ 1.359 $ 1.080 10% $ 0.054 $ 1.134 12% $ 0.091 $ 1.225 $ 0.232 $ 1.457 75% Fingold $ 0.448 $ 0.344 $ 0.516 $ 1.308 5% $0.196 $ 1.504 8% $ 0.226 $ 1.730 $ 0.192 $ 1.922 150% 15% 15% Last year, Frich decided to dual source with both Bayfleet and Union. Both suppliers have good (not great) scorecard scores-both have scores in the upper-80's. However, at the end of last year, both suppliers called to tell you they needed a 25% price increase moving forward. Bayfleet explained the increase was because their material costs had increased 25%. Union told you that their labor costs had increased by 25%. Fingold didn't submit a new cost plus, but told you that they would like your business and will give Frich a 2% reduction from last year's quote. wwwww While your predecessor quoted Fingold last year, Frich has not purchased any products from Fingold in the past year. Given the three bids that Frich received last year, and the new information from Bayfleet, Union, and Fingold develop a sourcing strategy as outlined on the next page. • Note: You should create cost analysis (similar to our in-class assignments) in excel to answer these questions. Include the excel file with your homework submission in Blackboard. For example: MGT 337 - Cost Plus Analysis Mini-Case Question 1 - Build a cost plus model in excel that represents last year's bids for all three suppliers, as shown above. Make sure the cost plus model is build using formulas in excel. In other words, don't just copy and paste the numbers into excel, but link the numbers using formulas. Do the same for 1a with the new quoted prices. 1. Use cost plus analysis to gain a better understanding of what factors are driving the price for each supplier. a. What are the new quoted prices from Bayfleet, Union and Fingold? b. What is the highest price that you are willing to pay Bayfleet, Union and Fingold given your cost plus analysis? You are the new purchasing manager for Frich Turbo Engine Company. Frich makes engines that use a forced induction device to increase airflow to the engine combustion chamber. This forced induction, created through the use of turbines, means more air - and more fuel-moves through the combustion chamber as compared to simple atmospheric pressure intake alone. As a result, Frich's turbo engines yield a high level of performance for customers. Last year, Frich requested bids for valves that go into the assemblies of the company's engines. Valves are considered Leverage items, since quality is important, but there are many suppliers for these items. Frich received the following bids from three suppliers: Last Year's Quotes: Materials Direct Labor Overhead Factory Cost SGA Total Cost Profit Product Price Tooling Selling Price | Bayfleet Union $ 0.414 $ 0.380 $ 0.288 $ 0.400 $ 0.317 110% $0.300 $ 1.019 $ 0.102 $ 1.121 $ 0.134 $ 1.255 $ 0.104 $ 1.359 $ 1.080 10% $ 0.054 $ 1.134 12% $ 0.091 $ 1.225 $ 0.232 $ 1.457 75% Fingold $ 0.448 $ 0.344 $ 0.516 $ 1.308 5% $0.196 $ 1.504 8% $ 0.226 $ 1.730 $ 0.192 $ 1.922 150% 15% 15% Last year, Frich decided to dual source with both Bayfleet and Union. Both suppliers have good (not great) scorecard scores-both have scores in the upper-80's. However, at the end of last year, both suppliers called to tell you they needed a 25% price increase moving forward. Bayfleet explained the increase was because their material costs had increased 25%. Union told you that their labor costs had increased by 25%. Fingold didn't submit a new cost plus, but told you that they would like your business and will give Frich a 2% reduction from last year's quote. wwwww While your predecessor quoted Fingold last year, Frich has not purchased any products from Fingold in the past year. Given the three bids that Frich received last year, and the new information from Bayfleet, Union, and Fingold develop a sourcing strategy as outlined on the next page. • Note: You should create cost analysis (similar to our in-class assignments) in excel to answer these questions. Include the excel file with your homework submission in Blackboard. For example: MGT 337 - Cost Plus Analysis Mini-Case Question 1 - Build a cost plus model in excel that represents last year's bids for all three suppliers, as shown above. Make sure the cost plus model is build using formulas in excel. In other words, don't just copy and paste the numbers into excel, but link the numbers using formulas. Do the same for 1a with the new quoted prices. 1. Use cost plus analysis to gain a better understanding of what factors are driving the price for each supplier. a. What are the new quoted prices from Bayfleet, Union and Fingold? b. What is the highest price that you are willing to pay Bayfleet, Union and Fingold given your cost plus analysis?

Answer rating: 100% (QA)

1a Bay fleet 1359 25 033975 169875 or 170 Union 147 25 03675 ... View the full answer