Excel Online Structured Activity: Total Cost of Ownership Kuantan ATV, Inc. assembles five different models of all-terrain vehicles (ATVs) from various ready-made components to serve the Las Vegas, Nevada, market. The company uses the same engine for all its ATVs. The purchasing manager, Ms. Jane Kim, needs to choose a supplier for engines for the coming year. Due to the size of the warehouse and other administrative restrictions, she must order the engines in lot sizes of 1,000 each. The unique characteristics of the standardized engine require special tooling to be used during the manufacturing process. Kuantan ATV agrees to reimburse the supplier for the tooling. This is a critical purchase, since late delivery of engines would disrupt production and cause 50 percent lost sales and 50 percent back orders of the ATVs. Jane has obtained quotes from two reliable suppliers but needs to know which supplier is more cost-effective. The terms of sale are 4/10 net 30 for Supplier 1 and 3/10 net 30 for Supplier 2 . The data related to the costs of ownership associated with two reliable suppliers has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet Questions 1. What is the total cost of ownership for each of the suppliers? Assume the buyer will take advantage of the largest discount. Do not round intermediate calculations. Round your answers to the nearest cent. Total Cost of Ownership Analysis \begin{tabular}{|c|c|c|} \hline Requirements (annual forecast units) & 14,000 & \\ \hline Lot size (Q) & 1,000 & \\ \hline Weight per engine (lbs) & 20 & \\ \hline Order processing cost (per order) & $130.00 & \\ \hline Inventory carrying rate (per year) & 20% & \\ \hline Cost of working capital (per year) & 10% & \\ \hline Profit margin & 22% & \\ \hline Price of finished ATV & $5,000 & \\ \hline Back-order cost (per unit) & $19.00 & \\ \hline Back-order lost sales & 50% & \\ \hline Late delivery lost sales & 50% & \\ \hline \multicolumn{3}{|l|}{ Other Information } \\ \hline Truckload (TL >=40,000lbs) & $0.80 & per ton-mile \\ \hline Less-than-truckload (LTL) & $1.50 & per ton-mile \\ \hline Per ton-mile & 2,000 & lbs per mile \\ \hline Days per year & 365 & \\ \hline Invoice payment period (days) & 30 & \\ \hline Discount period (days) & 10 & \\ \hline \end{tabular} Unit Price Supplier 1 1 to 999 units per order 1000 to 2999 units per order 3000+ units per order Tooling cost Terms (net 30) Distance (miles) Supplier Quality Rating (defects) Supplier Delivery Rating (lateness) Supplier 1 Total engine cost Cash discount (net 30) Cash discount (early payment) Tooling cost Transportation cost Ordering cost Carrying cost Quality cost Backorder cost Lost sales cost Total cost Lowest cost Supplier 2 G H I \begin{tabular}{|r|r|} \hline$530.00 & $505.00 \\ \hline$523.00 & $498.00 \\ \hline$515.00 & $493.00 \\ \hline$24,000 & $22,000 \\ \hline 4% & 3% \\ \hline 150 & 100 \\ \hline 2% & 3% \\ \hline 3% & 2% \\ \hline \end{tabular} Supplier 2 \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A Excel Online Structured Activity: Total Cost of Ownership Kuantan ATV, Inc. assembles five different models of all-terrain vehicles (ATVs) from various ready-made components to serve the Las Vegas, Nevada, market. The company uses the same engine for all its ATVs. The purchasing manager, Ms. Jane Kim, needs to choose a supplier for engines for the coming year. Due to the size of the warehouse and other administrative restrictions, she must order the engines in lot sizes of 1,000 each. The unique characteristics of the standardized engine require special tooling to be used during the manufacturing process. Kuantan ATV agrees to reimburse the supplier for the tooling. This is a critical purchase, since late delivery of engines would disrupt production and cause 50 percent lost sales and 50 percent back orders of the ATVs. Jane has obtained quotes from two reliable suppliers but needs to know which supplier is more cost-effective. The terms of sale are 4/10 net 30 for Supplier 1 and 3/10 net 30 for Supplier 2 . The data related to the costs of ownership associated with two reliable suppliers has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet Questions 1. What is the total cost of ownership for each of the suppliers? Assume the buyer will take advantage of the largest discount. Do not round intermediate calculations. Round your answers to the nearest cent. Total Cost of Ownership Analysis \begin{tabular}{|c|c|c|} \hline Requirements (annual forecast units) & 14,000 & \\ \hline Lot size (Q) & 1,000 & \\ \hline Weight per engine (lbs) & 20 & \\ \hline Order processing cost (per order) & $130.00 & \\ \hline Inventory carrying rate (per year) & 20% & \\ \hline Cost of working capital (per year) & 10% & \\ \hline Profit margin & 22% & \\ \hline Price of finished ATV & $5,000 & \\ \hline Back-order cost (per unit) & $19.00 & \\ \hline Back-order lost sales & 50% & \\ \hline Late delivery lost sales & 50% & \\ \hline \multicolumn{3}{|l|}{ Other Information } \\ \hline Truckload (TL >=40,000lbs) & $0.80 & per ton-mile \\ \hline Less-than-truckload (LTL) & $1.50 & per ton-mile \\ \hline Per ton-mile & 2,000 & lbs per mile \\ \hline Days per year & 365 & \\ \hline Invoice payment period (days) & 30 & \\ \hline Discount period (days) & 10 & \\ \hline \end{tabular} Unit Price Supplier 1 1 to 999 units per order 1000 to 2999 units per order 3000+ units per order Tooling cost Terms (net 30) Distance (miles) Supplier Quality Rating (defects) Supplier Delivery Rating (lateness) Supplier 1 Total engine cost Cash discount (net 30) Cash discount (early payment) Tooling cost Transportation cost Ordering cost Carrying cost Quality cost Backorder cost Lost sales cost Total cost Lowest cost Supplier 2 G H I \begin{tabular}{|r|r|} \hline$530.00 & $505.00 \\ \hline$523.00 & $498.00 \\ \hline$515.00 & $493.00 \\ \hline$24,000 & $22,000 \\ \hline 4% & 3% \\ \hline 150 & 100 \\ \hline 2% & 3% \\ \hline 3% & 2% \\ \hline \end{tabular} Supplier 2 \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A