14 Santa Cruz Bottling is a manufacturer of organic soft drinks on the coast of central California. Its products are enjoying a growing reputation and increased demand throughout the American Southwest. Because of the high cost of transporting soft drinks, it is considering a new plant to serve the states of New Mexico and Arizona. A key concern in its search for a new location is the resultant transportation costs to serve its key markets. Following is a list of cities where its main wholesale customers are located, along with estimated annual demand in cases of product for each. Skipped CITY Phoenix Tucson X-COORDINATES 285 y-COORDINATES 285 385 160 Albuquerque 835 Santa Fe 885 485 520 NUMBER OF CASES 21,000 16,500 24,500 13,000 a. Use the centroid method to recommend a location for the new bottling plant. (Round your answers to 1 decimal place.) Cx Cy ced One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 300,000 parts in year 1; 500,000 in year 2; and 700,000 in year 3. Shipping and handling of parts from the supplier's factory is estimated at $0.03 per unit. Additional inventory handling charges should amount to $0.004 per unit. Finally, administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.04 per unit. Direct labor is estimated at $0.05 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.013 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $40,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of 100 percent of direct labor cost. The firm uses a cost of capital of 15 percent per year. a. Calculate the difference in NPVs between the Make and Buy options. Express all costs as positive values in your calculations. It is suggested to use the NPV function in Excel. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Difference in NPV b. Should you continue to produce in-house or accept the bid from your Taiwanese supplier? Accept the bid O Produce in-house 6 The owner of a large machine shop has just finished its financial analysis from the prior fiscal year. Following is an excerpt from the final report: Net revenue $338,000 Cost of goods sold 299,000 Skipped Value of production materials on-hand Value of work-in-process inventory Value of finished goods on-hand 42,500 71,000 29,500 a. Compute the inventory turnover ratio (ITR). (Round your answer to 1 decimal place.) Inventory turnover ratio per year b. Compute the weeks of supply (WS). (Do not round intermediate calculations. Round your answer to 1 decimal place.) Weeks of supply 13 kipped A small manufacturing facility is being planned that will feed parts to three heavy manufacturing facilities. The locations of the current plants with their coordinates and volume requirements are given in the following table: PLANT LOCATION Peoria Decatur Joliet VOLUME COORDINATES (x, y) 308, 299 (PARTS PER YEAR) 3,900 366, 469 475, 181 5,900 2,850 Use the centroid method to determine a location for this new facility. (Round your answers to 1 decimal place.) Cx Cy