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 what assignment minimizes the total traffic flow, Please kindly sho...

Please kindly show step by step solutions. Six processes are to be laid out in six areas along a long corridor at Linda Babat Accounting Services. The distance between adjacent

[email protected], Modelling – meaning and process, Certainty and uncertainty...

Modelling – meaning and process, Certainty and uncertainty in models, importance of understanding data before modelling , modelling with spreadsheet in simple decision situations.

Explain adequately staff the office, Recommend one specific way that Thomas...

Recommend one specific way that Thomas can adequately staff the office in light of the many problems he has already experienced. Be sure to keep in mind the cultural issues that pl

Explain does a valid contract exist between two persons, You are currently ...

You are currently an intern working for the largest law firm in Alabama. Your mentor and senior attorney introduces you to a new client, Dick Jefferson, the owner of House Doctor,

Explain what does the term product positioning refer to, What does the term...

What does the term product positioning refer to? A careful analysis of cross tabulations Shelf locations in major chain, grocery, and department stores Geographic segmenta

Explain break even analysis, Explain Break Even Analysis. Break Even A...

Explain Break Even Analysis. Break Even Analysis: This Analysis implies that at several points in the operations, total revenue equivalent total cost. This analysis is concer

What is eoq and optimum time between orders, An industrial machine tools ma...

An industrial machine tools manufacturer supplies replacement parts from its inventory. For a particular part, the annual demand is expected to be 750 units. Machine setup costs ar

Soft change initiatives - linking strategic, Soft Change Initiatives - Link...

Soft Change Initiatives - Linking Strategic 1. Team working/investors in people (IIP) 2. Empowerment - understanding the value chain and the 'cycle' of failure  3. The l

Explain management rights, Identify the differences between the two theorie...

Identify the differences between the two theories of management rights. Discuss reasons why they are poles apart in determining whether management has responsibilities other than t

Why communication is an important consideration in firms, Communication is ...

Communication is an important consideration in organizations, and a number of different constructs fit within the communication viewpoint. What types of leader communication attitu

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