Question 4: Managing suppliers (25 marks) Electronic Toy Industries is undertaking an analysis of supplier costs in order to evaluate the relative costs and performance of each supplier. Currently, they are focusing attention on two suppliers of a small electric switch used in the manufacture of toys. The suppliers are Rockers Ltd and Toggle Ltd. Electronic Toy Industries has been dealing with these suppliers for several years. Rockers Ltd is used for a higher number of orders and charges only $4.00 per switch, whereas Toggle Ltd charges $4.20 per switch. in the past year, Electronic Toy Industries purchased 15,000 switches from Rockers Ltd and 5,000 switches from Toggle Ltd. For the most recent year, the following supplier-related activities and total costs have been identied for all suppliers of small electric switches: Total cost Number of activities Place -urchase order 100 orders Receive 8: inspect delivery Store inventory Rework product due to poor quality material Production downtime due to poor quality mate rial Receive and inspect late deliveries .000 $20,000 $15,000 $12,500 100 units stored per year 00 units reworked 100 hours downtime 50 late deliveries _ --m An analysis revealed that last year the following activities related to the two suppliers: Rockers Ltd Toggle Ltd 50 orders 20 orders 100 deliveries 40 deliveries 50 units per year 15 units per year Place purchase order Receive a inspect delivery Store inventory Rework product due to poor quality material Production downtime due to poor quality material Receive and inspect late deliveries 30 late deliveries 6 late deliveries