Question: Your purchasing manager has requested your assistance to evaluate two potential suppliers. The specification length for the widget is 80 10mm. The current supplier
Your purchasing manager has requested your assistance to evaluate two potential suppliers.
The specification length for the widget is 80 ± 10mm. The current supplier charges 2.85/unit. The the current demand is 1,000 units with an expected increase of 20% by next year.
| Current | Alternate A ($2.15/unit) | Alternate B ($2.95/unit) | ||||||||
| 72 | 86 | 78 | 86 | 66 | 86 | 80 | 86 | 82 | ||
| 70 | 84 | 76 | 84 | 66 | 84 | 78 | 84 | 80 | ||
| 70 | 84 | 76 | 84 | 66 | 80 | 80 | 84 | 80 | ||
| 72 | 86 | 76 | 86 | 72 | 78 | 80 | 86 | 86 | ||
| 72 | 86 | 76 | 86 | 70 | 80 | 76 | 74 | 84 | ||
| 76 | 80 | 74 | 72 | 70 | 80 | 78 | 80 | 80 | ||
| 78 | 78 | 72 | 70 | 72 | 80 | 78 | 74 | 78 | ||
| 76 | 80 | 74 | 70 | 72 | 74 | 78 | 74 | 84 | ||
| 78 | 80 | 74 | 84 | 86 | 74 | 70 | 74 | 80 | ||
| 78 | 80 | 74 | 86 | 74 | 74 | 76 | 78 | 76 | ||
What would your recommendation be? Justify your answer.
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ANSWER It is calculated by multiplying the potential number of buyers and the average quantity of ea... View full answer
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