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The Burdell Wheel and Tire Company assembles tires on wheel rims for use on cars during the manufacture of vehicles by the automotive industry. Burdell

The Burdell Wheel and Tire Company assembles tires on wheel rims for use on cars during the manufacture of vehicles by the automotive industry. Burdell wants to locate a low - cost supplier for the tires he uses in his assembly operation. The supplier will be selected based on the total annual cost to supply Burdell's needs. Burdell's annual requirements are for 2 5 , 0 0 0 ?tires, and the company operates 2 5 0 ?days a year. The following data is available for the two suppliers being considered.
SUPPLIER
SHIPPING QUANTITY PER SHIPMENT
Annual
SHIPPING COSTS
PRICE / ?TIRE ( p )
INVENTORY HOLD COSTS ( H )
LEAD TIME ( DAYS )
Annual
ADMIN. COSTS
LEXINGTON TIRE
2 , 0 0 0
$ 1 8 , 0 0 0
$ 3 0
$ 6 . 0 0
6
$ 1 5 , 0 0 0
IRMO AUTO
1 , 0 0 0
$ 2 5 , 0 0 0
$ 2 9
$ 5 . 8 0
4
$ 1 8 , 0 0 0
Using the Total Cost Analysis for Supplier Selection, which supplier should Burdell choose? Provide details to justify your answer. The total costs are calculated as the sum of material costs, freight ( shipping ) ?costs, inventory costs, and administrative costs.

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