Problem 16-12 (Algo) Your company assembles five different models of a motor scooter that is sold in specialty stores in

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Problem 16 12 Algo Your Company Assembles Five Different Models Of A Motor Scooter That Is Sold In Specialty Stores In 1 (94.87 KiB) Viewed 36 times

Problem 16-12 (Algo) Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,150 units. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected: Requirements (annual forecast) Weight per engine Order processing cost Inventory carry cost ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000 units/order Note: Assume that half of lot size is in inventory on average (1,150/2 = 575 units). Two qualified suppliers have submitted the following quotations: Tooling costs Distance Total cost Truckload (50,000 lbs. each load): Less-than-truckload: O Supplier 2 O Supplier 1 13,800 units 30 pounds Your assistant has obtained the following freight rates from your carrier: $ 170 per order 20 percent of the average value of inventory per year Supplier 1 SUPPLIER 1 UNIT PRICE 697 $ 695 694 a-2. Which supplier would you select? Total cost $26,080 125 miles Note: Per ton-mile = 2,000 lbs. per mile. a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) O Yes O No Supplier 1 Supplier 2 SUPPLIER 2 UNIT PRICE $ 696 696 693 b-1. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier. (Do not round intermediate calculations. Round "Required lot size for truckload" and final answers to the nearest whole number.) $22,600 100 miles $0.80 per ton-mile $1.20 per ton-mile HINT: Use (full) truckload cost rates and the lowest (feasible) unit cost for all calculations. For example, if there are 8.3 orders per year, don't split the 8.3 orders into 8 full truckloads and 0.3 less-than-truckloads - use the full truckload rate for all 8.3 orders. For annual purchase cost, don't use two different unit costs for the 8 complete orders and the 0.3 partial orders - use the lowest (feasible) unit cost for all 8.3 purchase orders based on the lot size needed for a full truckload. b-2. Would your supplier selection change? Supplier 2