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solve please and show your work Cow Spot Computer Co. outsources the production of motherboards for its computers. It is currently deciding which of two
solve please and show your work
Cow Spot Computer Co. outsources the production of motherboards for its computers. It is currently deciding which of two suppliers to use: Alpha or Beta. Due to differences in the product failure rates in the two companies, 5% of motherboards purchased from Alpha will be inspected and 25% of motherboards purchased from Beta will be inspected. The following data refers to costs associated with Alpha and Beta: (Click the icon to view the data.) Requirements 1. What is the relevant cost of purchasing from Alpha and Beta? 2. What factors other than cost should Cow Spot consider? Requirement 1. What is the relevant cost of purchasing from Alpha and Beta? Data Table Calculate the relevant cost of purchasing from Alpha and Beta. Beta Alpha 1,140,000 $ Alpha Beta $ 1,104,000 50 50 500 300 12,000 12,000 Purchase costs Ordering costs Inspection costs Required annual return on investment Stockout costs 4,200 21,000 $ 95 $ 92 114654 1217669 $ 10 $ 6 500 600 $ 7 $ 7 Return costs 1,050 10,500 100 units 100 units 290 290 Number of orders per year Annual motherboards demanded Price per motherboard Ordering cost per order Inspection cost per unit Average inventory level Expected number of stockouts Stockout cost (cost of rush order) per stockout Units returned by customers for replacing motherboards Cost of replacing each motherboard Required annual return on investment Other carrying cost per unit per year Other carrying costs 100 300 1261194 1250359 Total cost $ 5 $ 2 50 500 $ 21 $ 21 10% 10% $ 2.90 $ 2.90 Print DoneStep by Step Solution
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