You work as a supply chain manager for Primo Caf Inc. Primo Caf is a small-sized manufacturer of stylish coffee makers. The company has three distinct coffee makers that it produces. The Bean Boiler is Primo Caf's most basic model. The main materials used in manufacturing the Bean Boiler are aluminum and plastic. There are lots of suppliers for these materials. At present, Primo Caf's total cost for producing a Bean Boiler is $13 per unit and the product is competitively priced at $20 per unit. There are lots of other coffee makers that are very similar to the Bean Boiler on the market. Still, sales of the Bean Boiler are very stable. The company reliably sells 24,625 to 25,375 units of this product per month. The Family Man is Primo Caf's mid-market offering. Primo Caf manufactures most of the Family Man in-house, but buys the glass pot and the electronics that control the on/off function and the timer. At present, final assembly of the inhouse manufactured parts and the purchased sub-components occurs at Primo Caf's facility in Grand Rapids. Total cost for producing the Family Man is currently $32 per unit and each unit is sold for $34.99. The Family Man's sleek, artistic design and range of unique colors helps to distinguish it from a wide selection of similar products offered by competitors. Prices for direct competitors range from $25 to $45. Sales of the Family Man range from 19,400 to 20,600 units per month. The Caffissimo is Primo Caf's high-end offering. Primo Caf produces the external casing for the Caffissimo in-house, but buys all of the important subcomponents from external suppliers. The most important sub-components for the Caffissimo are the gauges that regulate the temperature and pressure of the water as it is forced through the coffee grounds. The proper working of these gauges ensure that the Caffissimo produces a perfect cup of coffee at brewing. The Caffissimo's design is a closely held company secret. The machine has won industry awards both in terms of its coffee making process and its external looks. Currently, the Caffissimo costs $375 to produce and sells for tively high price and unique design, demand for the Caffissimo is difficult to r, demand has ranged from 8,500 to 11,500 units per month. Primo Caf Inc. has been doing well. Revenue from its three lines of coffee makers have exceeded expectations. In fact, things have been going so well that lise, the company's innovative CEO and founder, has decided Primo Caf should offer its own brand of coffee beans. Gianna, the chief marketing officer, has already come up with a name - Primo's Premium Coffee - and estimates the company can sell 8,000 to 10,000 pounds of coffee per month at $15 per pound. There's only one thing left to do - find a supplier for the coffee beans. Marco, the COO and your boss, has given you the task of finding a supplier and you've narrowed the field to two candidates: African Coffee Unlimited LLC., located in Uganda, and South American Espresso Company, located in Colombia. You've come up with the following cost information for both suppliers. Duties on imports are 5% of the price for both suppliers. African Coffee Unlimited will be shipping to the Port of Long Beach in California, where port handling fees are 8% of the price of a container. Once the beans are offloaded in California, they will be transported via truck 2,190 miles to Primo's Grand Rapids facility. Duties on imports are 5% of the price for both suppliers. African Coffee Unlimited will be shipping to the Port of Long Beach in California, where port handling fees are 8% of the price of a container. Once the beans are offloaded in California, they will be transported via truck 2,190 miles to Primo's Grand Rapids facility. South American Espresso Company will be shipping to the Port of Charleston in South Carolina, where port handling fees are 13% of the price of a container. Once the beans are offloaded in South Carolina, they will be transported via truck 955 miles to Primo's Grand Rapids facility. Primo's warehousing costs in Grand Rapids will be the same for both - $50 per pallet. As with any perishable product, spoilage is a concern. Your best estimate is that - for both suppliers about 2.5% of the beans will not survive the trip and will have to be discarded after reaching Primo's warehouse. You also know that for a standard product like coffee, there are 250 pounds of coffee per pallet and 160 pallets per 40 -foot (40) container. 1. Based on this information, provide a complete total cost analysis for each supplier (per pound, per pallet, and per container). Complete the worksheet in excel. 2. What is the cost per pound from each supplier? 3. Identify two costs areas - other than price - that Primo Caf should focus on to decrease total cost. Give the percentages associated with each of the cost drivers that you identify. Explain why you choose those cost areas. Shipping prices: To lower delivery costs, Primo Caf could bargain with both suppliers. If at all.possible, companies should think about adopting different modes of transportation, such train or air, as they are occasionally less expensive than shipping goods by sea. Primo Caf may save about $500 per container with a 5% reduction in shipping costs. Costs associated with spoilage: Primo Caf could think about establishing better storage procedures or employing better packaging materials. For Primo Caf, a 0.5% decrease in spoilage might result in a $250 per container savings. 4. Given that there is 40,000 pounds of coffee per 40 -foot (40) container, then each container load will be 4 - 5 months of demand. To reduce warehousing cost and spoilage, you want to evaluate using a 20 -foot (20) container instead of the 40 container. Note that "price per pound", "shipping to port of export", "trucking cost", "duties", "port handling fees" are the numbers or percentages as stated above in this case. However, a 20 ' container holds 80 pallets with each pallet holding 250 pounds of coffee. Warehousing cost will be reduced from $50/ pallet to $25/ pallet for a 20 container. Spoilage will be reduced from 2.5% to 2.0% for a 20 container. 4. Given that there is 40,000 pounds of coffee per 40 foot (40) container, then each container load will be 4 - 5 months of demand. To reduce warehousing cost and spoilage, you want to evaluate using a 20 -foot (20) container instead of the 40 container. Note that "price per pound", "shipping to port of export", "trucking cost", "duties", "port handling fees" are the numbers or percentages as stated above in this case. However, a 20 ' container holds 80 pallets with each pallet holding 250 pounds of coffee. Warehousing cost will be reduced from $50/ pallet to $25/ pallet for a 20 container. Spoilage will be reduced from 2.5% to 2.0% for a 20 container. Oc Copy your 40' container worksheet into another worksheet for a 20 container analysis to understand if lower warehousing and spoilage costs will offset the cost of using a 20 container. You work as a supply chain manager for Primo Caf Inc. Primo Caf is a small-sized manufacturer of stylish coffee makers. The company has three distinct coffee makers that it produces. The Bean Boiler is Primo Caf's most basic model. The main materials used in manufacturing the Bean Boiler are aluminum and plastic. There are lots of suppliers for these materials. At present, Primo Caf's total cost for producing a Bean Boiler is $13 per unit and the product is competitively priced at $20 per unit. There are lots of other coffee makers that are very similar to the Bean Boiler on the market. Still, sales of the Bean Boiler are very stable. The company reliably sells 24,625 to 25,375 units of this product per month. The Family Man is Primo Caf's mid-market offering. Primo Caf manufactures most of the Family Man in-house, but buys the glass pot and the electronics that control the on/off function and the timer. At present, final assembly of the inhouse manufactured parts and the purchased sub-components occurs at Primo Caf's facility in Grand Rapids. Total cost for producing the Family Man is currently $32 per unit and each unit is sold for $34.99. The Family Man's sleek, artistic design and range of unique colors helps to distinguish it from a wide selection of similar products offered by competitors. Prices for direct competitors range from $25 to $45. Sales of the Family Man range from 19,400 to 20,600 units per month. The Caffissimo is Primo Caf's high-end offering. Primo Caf produces the external casing for the Caffissimo in-house, but buys all of the important subcomponents from external suppliers. The most important sub-components for the Caffissimo are the gauges that regulate the temperature and pressure of the water as it is forced through the coffee grounds. The proper working of these gauges ensure that the Caffissimo produces a perfect cup of coffee at brewing. The Caffissimo's design is a closely held company secret. The machine has won industry awards both in terms of its coffee making process and its external looks. Currently, the Caffissimo costs $375 to produce and sells for tively high price and unique design, demand for the Caffissimo is difficult to r, demand has ranged from 8,500 to 11,500 units per month. Primo Caf Inc. has been doing well. Revenue from its three lines of coffee makers have exceeded expectations. In fact, things have been going so well that lise, the company's innovative CEO and founder, has decided Primo Caf should offer its own brand of coffee beans. Gianna, the chief marketing officer, has already come up with a name - Primo's Premium Coffee - and estimates the company can sell 8,000 to 10,000 pounds of coffee per month at $15 per pound. There's only one thing left to do - find a supplier for the coffee beans. Marco, the COO and your boss, has given you the task of finding a supplier and you've narrowed the field to two candidates: African Coffee Unlimited LLC., located in Uganda, and South American Espresso Company, located in Colombia. You've come up with the following cost information for both suppliers. Duties on imports are 5% of the price for both suppliers. African Coffee Unlimited will be shipping to the Port of Long Beach in California, where port handling fees are 8% of the price of a container. Once the beans are offloaded in California, they will be transported via truck 2,190 miles to Primo's Grand Rapids facility. Duties on imports are 5% of the price for both suppliers. African Coffee Unlimited will be shipping to the Port of Long Beach in California, where port handling fees are 8% of the price of a container. Once the beans are offloaded in California, they will be transported via truck 2,190 miles to Primo's Grand Rapids facility. South American Espresso Company will be shipping to the Port of Charleston in South Carolina, where port handling fees are 13% of the price of a container. Once the beans are offloaded in South Carolina, they will be transported via truck 955 miles to Primo's Grand Rapids facility. Primo's warehousing costs in Grand Rapids will be the same for both - $50 per pallet. As with any perishable product, spoilage is a concern. Your best estimate is that - for both suppliers about 2.5% of the beans will not survive the trip and will have to be discarded after reaching Primo's warehouse. You also know that for a standard product like coffee, there are 250 pounds of coffee per pallet and 160 pallets per 40 -foot (40) container. 1. Based on this information, provide a complete total cost analysis for each supplier (per pound, per pallet, and per container). Complete the worksheet in excel. 2. What is the cost per pound from each supplier? 3. Identify two costs areas - other than price - that Primo Caf should focus on to decrease total cost. Give the percentages associated with each of the cost drivers that you identify. Explain why you choose those cost areas. Shipping prices: To lower delivery costs, Primo Caf could bargain with both suppliers. If at all.possible, companies should think about adopting different modes of transportation, such train or air, as they are occasionally less expensive than shipping goods by sea. Primo Caf may save about $500 per container with a 5% reduction in shipping costs. Costs associated with spoilage: Primo Caf could think about establishing better storage procedures or employing better packaging materials. For Primo Caf, a 0.5% decrease in spoilage might result in a $250 per container savings. 4. Given that there is 40,000 pounds of coffee per 40 -foot (40) container, then each container load will be 4 - 5 months of demand. To reduce warehousing cost and spoilage, you want to evaluate using a 20 -foot (20) container instead of the 40 container. Note that "price per pound", "shipping to port of export", "trucking cost", "duties", "port handling fees" are the numbers or percentages as stated above in this case. However, a 20 ' container holds 80 pallets with each pallet holding 250 pounds of coffee. Warehousing cost will be reduced from $50/ pallet to $25/ pallet for a 20 container. Spoilage will be reduced from 2.5% to 2.0% for a 20 container. 4. Given that there is 40,000 pounds of coffee per 40 foot (40) container, then each container load will be 4 - 5 months of demand. To reduce warehousing cost and spoilage, you want to evaluate using a 20 -foot (20) container instead of the 40 container. Note that "price per pound", "shipping to port of export", "trucking cost", "duties", "port handling fees" are the numbers or percentages as stated above in this case. However, a 20 ' container holds 80 pallets with each pallet holding 250 pounds of coffee. Warehousing cost will be reduced from $50/ pallet to $25/ pallet for a 20 container. Spoilage will be reduced from 2.5% to 2.0% for a 20 container. Oc Copy your 40' container worksheet into another worksheet for a 20 container analysis to understand if lower warehousing and spoilage costs will offset the cost of using a 20 container