Given the information below, use total analysis to determine which supplier is more cost-effective. Cost of working capital is 12% per year. Assume there are
Given the information below, use total analysis to determine which supplier is more cost-effective. Cost of working capital is 12% per year. Assume there are 360 days in a year. (04 Marks)
Information Given | Supplier A | Supplier B | Supplier C |
Equipment purchase price | $6,110/unit FOB | $6,700/unit CIF | $6,520/ unit C&F |
Terms | 2/10 net 30 | 1/15 net 30 | 3/10 net 20 |
Number of motors needed | 10 | 10 | 10 |
Weight per motor | 150 lbs | 130 lbs | 170 lbs. |
Distance fom Port | 200 miles | 150 miles | 120 miles |
Insurance | 2% OF Purchase amount | 2% OF Purchase amount | 2% OF Purchase amount |
Freight | 1500 | 1500 | 1500 |
Installation fee | $2,000 | No Charge | $500 |
Notes: 1) Transportation cost = $10/ton-mile 2) Per ton-mile = 2,000 lbs per mile
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