Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can someone help me out? It is showing that my answers are incorrect. your company assembles Tive diferent models or a motor scooter that is
Can someone help me out? It is showing that my answers are incorrect.
your company assembles Tive diferent models or 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 1,040 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 12,480 units forecast) Weight per engine 25 pounds Order processing cost $ 215 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 (1,040/2 = 520 units). Two qualified suppliers have submitted the following quotations. SUPPLIER 1 SUPPLIER 2 ORDER QUANTITY UNIT PRICE UNIT PRICE 1 to 1,499 $ 556 units/order $ 554 1,500 to 2,999 units/order 552 554 3,000 + units/order 550 548 Tooling costs $25,900 $22,000 115 Distance 100 miles miles Your assistant has obtained the following freight rates from your carrier. Truckload (42,000 lbs. each load): Less-than-truckload: $0.80 per ton-mile $1.20 per ton-mile Note: Per ton-mile = 2,000 lbs. per mile. a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) Supplier 1 Supplier 2 Total cost 37,073,396 3700115,504 a-2. Which supplier would you select? Supplier 2 Suppler 1 b-1. If you could move the lot size up to ship In truckload quantities, calculate the total cost for each supplier. (Do not round intermediate calculations. Round "Required lot size for truckload" and final answers to the nearest whole number.) 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 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. Total cost Supplier 1 Supplier 2 37,081,2333 7,008,277 b-2. Would your supplier selection change? Yes NoStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started