Question
GoGo Furniture needs to purchase glass panes to make glass top coffee tables. Last year GoGo Furniture has two suppliers, BolBol and TolTol. Based on
GoGo Furniture needs to purchase glass panes to make glass top coffee tables. Last year GoGo Furniture has two suppliers, BolBol and TolTol. Based on last year's expernece with these two suppliers, GoGo provides you with the following supplier related information:
Supplier related activities | Cost driver | Cost per driver unit | BoIBoI | ToIToI |
Returning poor quality glass panes | No. of glass panes returned | $120 | 25 | 10 |
Processing purchase orders | No. of purchase orders | $20 | 15 | 30 |
Receiving and inspecting deliveries | No. of deliveries | $50 | 15 | 15 |
Supplier audit | No. of audits | $1000 | 5 | 2 |
Rework due to poor quality glass | No. of glass top tables reworked | $100 | 60 | 15 |
Purchase price per glass pane | $100 | $150 | ||
No. of glass panes purchased | 500 | 800 |
Required:
- Measure the total cost of ownership for BolBol and TotTol.
- Discuss which supplier is performing more satisfactorily.
- What could be done to improve the performance of each supplier?
- What other performance measures could be used to compare the performance of BolBol and TolTol.
Step 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