Soft Glow, Inc. manufactures light bulbs. Their purchasing policy requires that the purchasing agents place each quarter's purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).

To make its bulb products, Soft Glow requires 45,000 pounds of glass per quarter. Soft Glow received two glass bids for the third quarter, as follows:

Mid-States Glass Company: $28.00 per pound of glass. Delivery schedule: 45,000 (500 lbs. x 90 days) pounds at the beginning of July to last for 3 months.

Cleveland Glass Company: $28.20 per pound of glass. Delivery schedule: 500 pounds per working day (90 days in the quarter).

Soft Glow accepted Mid-States Glass Company's bid because it was the low-cost bid.

Required:

1. All of the following are ways in which Soft Glow could develop long-term partnerships with its suppliers except:

share research and development efforts.

ignore internal costs caused by delivery delays while contracting on the best price point basis.

share production schedules.

establish electronic data interchange.

establish supplier raw materials logistical support.

2. Hidden costs beyond the price of Mid-States Glass Company's bid include all of the following except:

3. Considering just inventory financing costs, what is the additional cost per pound of Mid-States Glass Company's bid if the annual cost of money is 10%? Round to the nearest cent. $ per lb.