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 3/10 net 30 for Supplier 1 and 1/10 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.

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.

How do you calculate the Discount rate for each supplier?

Which supplier is more cost-effective?

Total Cost of Ownership Analysis Requirements (annual forecast units) 14,000 1,000 1 to 999 units per orden 1000 to 299 units per order 517.00 S513.00 Order processing cnst (per order) Inventory carying rate (per year) Cost ot working capital (per year) Supplier Quality Rating (defects) Supplicr Delivery Rating (lateness) Prioc of finished ATV Uack-order cost (per unt) $4,000 Supplier 1 Supplier 2 Formulas Cesh discount (net 30) Cash discount (early payrment) Truckload (TL> 40,000 lbs) 070 per ton-mile 1.30 per lonHmie 2,000 lbs per mile Invoice payment period (days)