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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:

  1. Measure the total cost of ownership for BolBol and TotTol.
  2. Discuss which supplier is performing more satisfactorily.
  3. What could be done to improve the performance of each supplier?
  4. What other performance measures could be used to compare the performance of BolBol and TolTol.

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