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Q1. ABCD is going to purchase an auto parts component from one of two competing suppliers and it is going to base its decision, in

Q1. ABCD is going to purchase an auto parts component from one of two competing suppliers and it is going to base its decision, in part, on the supply chain performance of the two suppliers. The company has obtained the following data for average raw materials, work-in-process, and finished goods inventory value, as well as cost of goods sold for the suppliers. Assume each supplier operates 50 weeks per year.

Supplier 1 Supplier 2
Cost of goods sold $8,500,000 $14,800,000
Raw materials 255,000 870,000
Work-in-process 62,000 550,000
Finished goods 33,000 180,000
  1. Determine which supplier has the best supply chain performance according to inventory turns and weeks of supply.
  2. What other factors would the company likely take into account in selecting a supplier?

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