What is the total cost of the cheapest supplier?

16. Given the following information, use total cost analysis to determine which supplier is more cost-effective. Late delivery of raw material results in 60 percent lost sales and 40 percent back orders of finished goods. Order lot size Requirements (annual forecast) Weight per engine Order processing cost Inventory carrying rate Cost of working capital Profit margin Price of finished goods 1000 120,000 units 22 pounds $ 125/order 20% per year 10% per year $4500 $15 per unit Back-order cost ITEMS 1 to 999 units/order 1000 to 2999 units/order 3000+ units/order Tooling cost Terms Distance Supplier quality rating Supplier delivery rating SUPPLIER 1 $50.00/unit $49.00/unit $48.00/unit $ 12,000 2/1 0, net 30 125 miles 2% 1% Truckload (TL 2 40,000 lbs): Less-than-truckload (LTL): Note: per ton-mile 2000 lbs per mile; number of days per year SUPPLIER 2 $49.50/unit $48.50/unit $48.00/unit $ I O,OOO 1/1 0, net 30 100 miles 2% 2% $0.85 per ton-mile $1.10 per ton-mile 365