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Need help! A-1 is incorrect. Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States.
Need help! A-1 is incorrect. Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,050 units, Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier . Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use The following data have been collected Requirements (annual forecast) Weight per engine Order processing cost Inventory carry cost 12,600 units 25 pounds $ 165 per order 20 percent of the average value of inventory per year Note Assume that half of lot size is in inventory on average (1.050/2-525 units) Two qualified suppliers have submitted the following quotations. ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000+ units/order Tooling costs Distance SUPPLIER 1 SUPPLIER 2 UNIT PRICE UNIT PRICE S 534 5 532 SJO 532 529 526 $27,000 $24,800 130 miles 100 miles Your assistant has obtained the following freight rates from your carrier Your assistant has obtained the following freight rates from your carrier Truckload (53,088 lbs. each load): Less-than-truckload: $0.80 per ton-mile $1.20 per ton-mile Note: Per ton-mile = 2,000 lbs.per mile. 0-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) Total cost Supplier 1 6,838,02015 Supplier 2 6,804,740
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