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

Explain small business manager, Class, on the final exam you may be asked t...

Class, on the final exam you may be asked the difference between an entrepreneur and a "small business manager" (Hatten, 2009, p. 29) so let's practice with it here. What is the di

MBA-2, What do you understand by"line balancing"?What happens if balance do...

What do you understand by"line balancing"?What happens if balance doesn''t exist?

Define relationship among the different levels of management, 1. Show graph...

1. Show graphically, and explain, the relationship between the different levels of management, types of problems, and types of decisions. What do we mean by the term "bounded ratio

Explain what factors have contributed to its growth, When was the Mexican a...

When was the Mexican aerospace industry established and what factors have contributed to its growth?

Explain how compensation information is tracked, 1) An organization followi...

1) An organization following a differentiation strategy would most likely offer a compensation mix which was made up of: a. performance bonus. b. comprehensive benefits. c

What is network program rating, Nielsen ratings are very important to both ...

Nielsen ratings are very important to both advertisers and television programmers because the cost of television advertising time is based on this rating. A show's rating is the nu

Game theory, Consider the following parlor game to be played between two pl...

Consider the following parlor game to be played between two players. Each player begins with three chips: one red, one white, and one blue. Each chip can be used only once. To beg

Describe what is customer relationship management, What is Customer Relatio...

What is Customer Relationship Management? Describe the four-step framework for one-to-one marketing that can be adapted to CUSTOMER RELATIONSHIP MANAGEMENT marketing?

How reduce the safety stock, The annual demand for a product is 15,600 unit...

The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $31.20, and the time from order

Describe what is role of a cio in todays global business, 1. What is the ro...

1. What is the role of a CIO in today's global business environment? 2. Dr. Carr presents a good argument in the "IT doesn't matter" reading. Present your view of Carr's central

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