Subject: Operations management

3) There are two subcontractors that produce electronic components for the charging module that fits Auto-El-Motos electric cars, both offer a discounted price depending on the order, and both are abroad. The table shows their offer depending on order quantity. The order cost is 1500 SEK / order; the storage cost is 30% of the respective discounted product price, and the demand for it next production year is 500 units.

Subcontractor	discount number	discounted amount	discount	price in SEK per unit
West Coast Electrics	1	0 to 30	0%	7000
West Coast Electrics	2	31 to 50	5%	6650
West Coast Electrics	3	51 and more	10%	6300
Sustainable Asia Motors	1	0 to 25	0%	6850
Sustainable Asia Motors	2	26 to 35	3%	6644,5
Sustainable Asia Motors	3	36 to 45	5%	6507,5
Sustainable Asia Motors	4	46 and more	8%	6302

a) Investigate and report which subcontractor is most economical to use as well find out what order size you should make to keep the total cost of your business so low as possible.

b) If you knew that: (i) West Coast Electric has previously been charged with substandard working conditions where employees have been denied a break by their supervisors, and that The company has been known for letting employees work under lack of ergonomics prerequisites. ii) Sustainable Asia Motors has been linked to espionage by its customers in other countries. iii) There are no other options of companies that can supply them electronic components that you need in production.

Which subcontractor would you choose based on a quality strategy? Explain how you would take that decision?