Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at
Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda's request, all bids are for a shipping quantity (Q) of 20,000 bottles with annual requirements (D) of 40,000 units. Wanda's factory operates 250 days a year. The following table shows each supplier's price, estimated annual freight costs, and current lead times; management has added estimates for holding costs and administrative oversight costs for each supplier. Annual Freight Price/Unit Holding Cost/Unit Lead Time (L) Annual Administrative Supplier Costs (p) (H) (days) Costs Dover Plastics $3,500 $5.10 $1.02 20 $3,000 Evan & Sons $4,500 $5.00 $1.00 16 $4,000 Farley, Inc. $4,000 $5.15 $1.03 17 $5,000 a. Which of the three suppliers will provide the lowest annual cost to Wanda Lux? Using Evan is the lowest cost alternative, with annual total costs to Wanda Lux of $221,060. (Enter your response rounded to the nearest whole number.) Beyond costs, however, Wanda has three other criteria considered important in the selection of a supplier. The following table shows all the criteria, their weights, and the scores for all of them except total costs, where a score of 1.0 indicates "poor" and 10 indicates "superior." Because all three suppliers have done business with Wanda Lux before, management will assign a score of "10" to the supplier with the lowest total annual cost, a score of "8.5" for the next lowest cost, and a score of "7.0" for the worst cost of the three. Criteria 1. Total Cost Weight Dover Rating Evan Farley 30 ? ? 7 2. Consistent Quality 30 8 7 9 3. On-Time Delivery 20 9 9 7 4. Environment 20 8 7 7 b. Given Wanda's criteria and weighting system, which supplier should Wanda award the contract to? 835 (Enter your response as an integer.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started