Question
LM.82 Nottingham Equipment sells high-end food processing equipment and systems to food processing plants. They are seeking bids for a powerful electric motor which will
LM.82 Nottingham Equipment sells high-end food processing equipment and systems to food processing plants. They are seeking bids for a powerful electric motor which will be used in one of their new products. Their forecasts show they will need 440 units per month. They have two supplier options: one domestic and one foreign. The table below summarizes the costs for these two options. Note that the administrative fee is a monthly flat fee, not a per-unit fee.
Criteria | Domestic | Foreign |
---|---|---|
Price/Unit | $24.44 | $21.58 |
Packaging Cost/Unit | $1.74 | $1.89 |
International Shipping/Unit | $0 | $1.00 |
Freight Forwarder Fee/Unit | $0 | $0.05 |
U.S. Port Handling/Unit | $0 | $1.30 |
Inland Freight/Unit | $1.89 | $2.12 |
Flat Fee Admin Cost/Month (not per unit) | $27.58 | $103.27 |
What is the total landed cost (per month) for the domestic supplier? (Display your answer as a whole number.) What is the total landed cost (per month) for the foreign supplier? (Display your answer as a whole number.) Suppose actual demand is only 87% of expected demand. What would be the total landed cost of the domestic supplier? (Display your answer as a whole number.) At what volume of demand would the total cost be the same for the domestic supplier and the foreign supplier? (Display your answer as a whole number.)
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