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 1,240 units. 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) Weight per engine Order processing cost Inventory carry cost ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000+ units/order Tooling costs Distance Note: Assume that half of the lot size is in inventory, on average (1,240/2 = 620 units). Two qualified suppliers have submitted the following quotations: Total cost 14,880 units 25 pounds Supplier 1 a-2. Which supplier would you select? O Supplier 1 O Supplier 2 $190 per order 20 percent of the average value of inventory per year Your assistant has obtained the following freight rates from your carrier: Truckload (45,000 pound each load): Less-than-truckload: $0.80 per ton-mile $1.20 per ton-mile Note: Per ton-mile = 2,000 pound per mile. a-1. Calculate the total cost for each supplier. Note: Round your answers to the nearest whole number. SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE $575 $572 565 570 555 553 $30,100 $28,000 120 miles Supplier 2 100 miles

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Publisher:WINSTON, Wayne L.
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Question 13 please help

Note: Per ton-mile = 2,000 pound per mile.
a-1. Calculate the total cost for each supplier.
Note: Round your answers to the nearest whole number.
Total cost
a-2. Which supplier would you select?
O Supplier 1
O 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.
Note: Do not round intermediate calculations. Round "Required lot size for truckload" and final answers to the nearest whole
number.
Total cost
HINT: Use (full) truckload cost rates and the lowest (feasible) unit cost for all calculations. For example, if there are 8.3 orders per year,
don't split the 8.3 orders into 8 full truckloads and 0.3 less-than-truckloads - use the full truckload rate for all 8.3 orders. For annual
purchase cost, don't use two different unit costs for the 8 complete orders and the 0.3 partial orders - use the lowest (feasible) unit
cost for all 8.3 purchase orders based on the lot size needed for a full truckload.
Supplier 2
O Yes
O No
Supplier 1
Supplier 2
b-2. Would your supplier selection change?
Transcribed Image Text:Note: Per ton-mile = 2,000 pound per mile. a-1. Calculate the total cost for each supplier. Note: Round your answers to the nearest whole number. Total cost a-2. Which supplier would you select? O Supplier 1 O 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. Note: Do not round intermediate calculations. Round "Required lot size for truckload" and final answers to the nearest whole number. Total cost HINT: Use (full) truckload cost rates and the lowest (feasible) unit cost for all calculations. For example, if there are 8.3 orders per year, don't split the 8.3 orders into 8 full truckloads and 0.3 less-than-truckloads - use the full truckload rate for all 8.3 orders. For annual purchase cost, don't use two different unit costs for the 8 complete orders and the 0.3 partial orders - use the lowest (feasible) unit cost for all 8.3 purchase orders based on the lot size needed for a full truckload. Supplier 2 O Yes O No Supplier 1 Supplier 2 b-2. Would your supplier selection change?
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 1,240 units.
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)
Weight per engine
Order processing cost
Inventory carry cost
Note: Assume that half of the lot size is in inventory, on average (1,240/2= 620 units).
Two qualified suppliers have submitted the following quotations:
ORDER QUANTITY
1 to 1,499 units/order
1,500 to 2,999 units/order
3,000+ units/order
Tooling costs
Distance
Total cost
14,880 units
25 pounds
$190 per order
20 percent of the average value of inventory per year
Your assistant has obtained the following freight rates from your carrier:
Truckload (45,000 pound each load):
Less-than-truckload:
Note: Per ton-mile = 2,000 pound per mile.
a-1. Calculate the total cost for each supplier.
Note: Round your answers to the nearest whole number.
Supplier 1
a-2. Which supplier would you select?
O Supplier 1
O Supplier 2
SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE
$575
$572
565
570
555
553
$30,100
$28,000
120 miles
$0.80 per ton-mile
$1.20 per ton-mile
Supplier 2
100 miles
Transcribed Image Text: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 1,240 units. 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) Weight per engine Order processing cost Inventory carry cost Note: Assume that half of the lot size is in inventory, on average (1,240/2= 620 units). Two qualified suppliers have submitted the following quotations: ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000+ units/order Tooling costs Distance Total cost 14,880 units 25 pounds $190 per order 20 percent of the average value of inventory per year Your assistant has obtained the following freight rates from your carrier: Truckload (45,000 pound each load): Less-than-truckload: Note: Per ton-mile = 2,000 pound per mile. a-1. Calculate the total cost for each supplier. Note: Round your answers to the nearest whole number. Supplier 1 a-2. Which supplier would you select? O Supplier 1 O Supplier 2 SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE $575 $572 565 570 555 553 $30,100 $28,000 120 miles $0.80 per ton-mile $1.20 per ton-mile Supplier 2 100 miles
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