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Alpha Medical Manufacturing (AMM), located in Punta Gorda, Florida, produces medical devices for orthopedic surgery including replacement parts for human knees, hips, and elbows, and
Alpha Medical Manufacturing (AMM), located in Punta Gorda, Florida, produces medical devices for orthopedic surgery including replacement parts for human knees, hips, and elbows, and surgical tools. One product they assemble in their factory is a special aluminum alloy surgical screw used to anchor human tissue to the bone. The screw consists of four component parts, one being the aluminum alloy while the other three parts are made of medical grade plastics. AMM is evaluating three Tier 1 suppliers to manufacture the aluminum part of the orthopedic screw. Annual demand for this item is 30,000 units per year, with 365 days in a year. Other information is shown in the table below. Alpha Medical Manufacturing (AMM) Outsourcing Information for a Surgical Screw Contract Price per Price per Tariff Transport Order Cost to Store Order Lead Manufacturer Unit (C) @ Unit (C) @ Cost (TC) Mode Cost Costs One Unit per time in (Tier 1 Supplier) Q = 15,000 Q = 30,000 per Unit (Tm) per Unit (Co) Year (Cn) Days Xiajing Supplier $1.09 $0.90 $0.17 $0.40 $535 $1.25 130 Boston Medical $1.27 $1.11 $0.00 $0.10 $325 $1.25 110 Supplier Werkzeug $1.42 $1.07 $0.19 $0.30 $350 $1.25 140 Supplier a. What is the total annual logistics cost for each supplier when Q = 15,000 and Q = 30,000? Do not round intermediate calculations. Round your answers to the nearest dollar Global Supplier Xiajing Supplier $ 76741 Order Quantity (2) 15,000 units 30,000 units 66923 $ 56776 $ 66676 74567 $ 80284 Boston Medical Supplier Werkzeug Supplier b. What supplier and order quantity do you recommend based on these total costs? The company should choose Boston Medical Supplier and the order quantity of 15,000 units
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