Calculate the total cost for supplier

Assignment Help Operation Management
Reference no: EM13104717

Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,320 each. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:

      
  Requirements (annual forecast) 15,840 units
  Weight per engine 25 pounds
  Order processing cost $130 per order
  Inventory carry cost 20 percent of the average value of inventory per year
 

Note: Assume that half of lot size is in inventory on average (1,320/2 = 660 units).

  
Two qualified suppliers have submitted the following quotations:
  ORDER QUANTITY SUPPLIER 1
UNIT PRICE
SUPPLIER 2
UNIT PRICE
  1 to 1,499 units/order    $ 535         $ 534     
  1,500 to 2,999 units/order   533        534     
  3,000 + units/order   531        528     
  Tooling costs    $ 31,760         $ 29,000     
  Distance 130 miles 100 miles
 

Your assistant has obtained the following freight rates from your carrier:

      
  Truckload (54,000 lbs. each load): $0.80 per ton-mile
  Less-than-truckload: $1.20 per ton-mile
 

Note: Per ton-mile = 2,000 lbs. per mile.

 

a-1.

Calculate the total cost for each supplier. (Round your answers to the nearest whole number.)

        Supplier 1       Supplier 2
  Total cost $ $
 
a-2.

Which supplier would you select?

    
 
  Supplier 2
  Supplier 1

 

b-1.

If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier. (Do not round intermediate calculations. Round "Required lot size for truckload" and final answers to the nearest whole number.)

 

        Supplier 1        Supplier 2
  Total cost $ $   

Reference no: EM13104717

Name five products or services that your social group

Name five products or services that your social group uses a lot. State whether you agree or disagree with the notion that these products help to form group bonds. Support you

Assignment on quality culture vs traditional culture

Assignment on Quality Culture vs Traditional Culture, There are various differences between a quality culture and a traditional culture. While formulating strategies and impl

Measures of corporate social responsibility reflect

Goals and objectives from different departments within an organization. Measures of Corporate Social Responsibility (CSR) reflect a need for organizations. "Measuring what you

Discuss the confidence intervals also their usefulness based

Discuss the effect of any seasonal factors utilizing the process performance data collected each week. Discuss the confidence intervals also their usefulness based on the numb

In examining phases of conflict interaction

In examining phases of conflict interaction, some critical events activate latent conflict. This triggering event turns a consciousness of opposition into acknowledged conflic

Creating a public relations campaign

Trying to create a public relations campaign for a financial institution that recently received negative exposure in the media for lack of responsiveness to consumers wishing

Original equipment manufacturers-strategic management theory

You are the management team of a start up company that will produce hard drives for the personal computer (PC) industry. you will sell your product to manufactures of PC's (or

Brands each have their own associations and personalities

As we’ve learned this week, brands signal customers by giving them information about predictability in their purchases. Brands each have their own associations and personaliti

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd