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 2/10 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.

2. Which supplier is more cost-effective?

template Excel rt Data Review View Help Tell me what you want to do Home A A !! w Ta Aal 10 Sart & Fnd& Fter-Select- Conditional Format inert Delete Fomat Clear A. EE Merge a Center S- % Pate BIUR Formatng Table Fermn Pter Alget Nue Tables B16 G. C. Tetal Cost of Owmenship Analyeis Unit Price 1b999 unts per order Supplier 1 $505.00 Supplier 2 $505.00 Requinamers (annual forecest un) Lot sre (a Weight per engine (be) Order processing cost (per onder) nvertory camying rale per year) Cot of working capital per year) Proft margin Price of frihed ATV Back order oont (per un Back-onder lost sales Lale delvery lost sales 11,000 $500.00 $494.00 $499.00 $490.00 $23,000 3% 140 2% 3% 1,000 1000 lo 2099 units per order 3000+ units per order Tooling cost Terms (net 30 Distance (mles) Suppler Quality Raing (delects) Suppler Delivery Raing (lateness) 30 $22.000 $140.00 20% 2% 105 10% 20% 1% $4800 $17.00 S0% 50% 31 Supplier 1 Supplier 2 Formulas NIA INIA NIA NIA INIA Total engine cot Cash decount (net 30) Cash discount (early payment) Tooling cost Transportation cost Ordering cost Carying cost Quality cost Backorder cost Lost sales cost Total post 13 34 ANIA NIA Other Information Trucked (TL40.000 bs Les-tan-tuckload (LTL) S0 80 per ton-mile ST40 per lon-mile NA INA NA Per ton-mie 2,000 bs per mle A Days per year Ivoice paymert perod (days) Disoourt period (days) 366 NIA INIA 30 ANIA 10 INIA INIA NIA INIA Lowest cost INIA Sheett me MacBook Air