Describe quantities would your supplier selection change, Operation Management

Assignment Help:

Your company assembles five different models of a motor scooter that is sold in specialty store 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 1,000 each. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process 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 has been collected

Requirements (annual forecast) = 12,000 Units

Weight per engine = 22 pounds

Order processings cost = $125 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 (1,000/2= 500units)

Two qualified suppliers have submitted the following quatations:

Unit Price Supplier 1 Supplier 2

1 to 999 units/order $510 $505

1,000 to 2,999 500 498

3,000 + 490 488

tooling costs $22,000 $20,000

Distance 125Miles 100Miles

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

Truckload (40,000 each load): $0.80 per ton-mile

Less-Than-Truckload: $1.20 per ton-mile

A.) Perform a total cost of ownership analysis and select a supplier.

B.) If you could move the lot size up to ship in truckload quantities would your supplier selection change?


Related Discussions:- Describe quantities would your supplier selection change

Dave., Henrique Correa’s bakery prepares all its cakes between 4am and 6am ...

Henrique Correa’s bakery prepares all its cakes between 4am and 6am so they will be fresh when customers arrive. Day old cakes are virtually always sold, but at a 50% discount off

Explain project manager is normally directly accountable, The project manag...

The project manager is normally directly accountable for the project result, schedule and budget.

Explain behavior and performance with the objectives, The effectiveness of ...

The effectiveness of any compensation system to attract, retain and align employee behavior and performance with the objectives of the enterprise is dependent upon management credi

Explain effectiveness change as an organization grows, The __________ _____...

The __________ ____________ ___________ approach to success suggests that measures of effectiveness change as an organization grows. Answer

LPP, A PAPER MILL PRODUCES TWO GRADES OF PAPER VIZ., X AND Y. BECAUSE OF RA...

A PAPER MILL PRODUCES TWO GRADES OF PAPER VIZ., X AND Y. BECAUSE OF RAW MATERIAL RESTRICTIONS, IT CANNOT PRODUCE MORE THAN 400 TONS OF GRADE X PAPER AND 300 TONS OF GRADE Y PAPER I

Explain how to create a living, What would you suggest to companies on how ...

What would you suggest to companies on how to create a living, adapting marketing plan?

What are the major operational functions in the organisation, What are the ...

What are the major operational functions in the organisation? Main operational functions in the organisation are as follows: • Marketing and sales for example, identifying w

Explain the four-step framework, Describe the four-step framework for one-t...

Describe the four-step framework for one-to-one marketing that can be adapted to CRM marketing?

Look to shareholders - financial perspective, Look to Shareholders - Financ...

Look to Shareholders - Financial Perspective  In this perspective, the company identifies individual function contribute to the accomplishment of its overall mission and strat

Curtis and kastner stakeholder model, Curtis and Kastner Stakeholder Model ...

Curtis and Kastner Stakeholder Model Curtis and Kastner (1987) sought ways of adding value for each stakeholder group to ensure the long term success of the organisation. Int

Write Your Message!

Captcha
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