Question
Kinnear Plastics manufactures various components for the aircraft and marine industry. Kinnear buys plastic from two vendors: Tappan Corporation and Hill Enterprises. Kinnear chooses the
Kinnear Plastics manufactures various components for the aircraft and marine industry. Kinnear buys plastic from two vendors: Tappan Corporation and Hill Enterprises. Kinnear chooses the vendor based on price. Once the plastic is received, it is inspected to ensure that it is suitable for production. Plastic that is deemed unsuitable is disposed of. The controller at Kinnear collected the following information on purchases for the past year.
Tappan Hill Total purchases (tons) 4,400 8,200
Plastic discarded 110 410
The purchasing manager has just received bids on an order for 150 tons of plastic from both Tappan and Hill. Tappan bid $1,482 and Hill bid $1,463 per ton. Which statement is TRUE in this case?
Group of answer choices
Buying from Hill is more expensive than from Tappen because Hill provides better quality of materials than Tappen.
Buying from Hill is less expensive than from Tappen because Hill's bid per ton is lower than Tappan's.
Buying from Hill is more expensive than from Tappen by $20 per ton after considering the cost of plastic discarded.
Buying from Hill is less expensive than from Tappen by $19 per ton after considering the cost of plastic discarded.
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