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 scooterthat is sold in specialty stores in the United States. The companyuses the same engine for all five models. You have been given theassignment of choosing a supplier for these engines for the comingyear. Due to the size of your warehouse and other administrativerestrictions, you must order the engines in lot sizes of 1,050units. Because of the unique characteristics of the engine, specialtooling is needed during the manufacturing process for whichyou agree to reimburse the supplier. Your assistant has obtainedquotes from two reliable engine suppliers and you need to decidewhich to use. The following data have been collected:
Note: Assume that half of lot size is in inventory onaverage (1,050/2 = 525 units).
Two qualified suppliers have submitted the followingquotations:
Your assistant has obtained the following freight rates from yourcarrier:
Note: Per ton-mile = 2,000 lbs. per mile.
a-1. Calculate the total cost for eachsupplier. (Round your answers to the nearest wholenumber.)
a-2. Which supplier would you select?
multiple choice 1
Supplier 1
Supplier 2
b-1. If you could move the lot size up to ship intruckload quantities, calculate the total cost for each supplier.(Do not round intermediate calculations.Round "Required lot size for truckload"and final answers to the nearestwhole number.)
HINT: Use (full) truckload cost rates and the lowest (feasible)unit cost for all calculations. For example, if there are 8.3orders per year, don’t split the 8.3 orders into 8 full truckloadsand 0.3 less-than-truckloads - use the full truckload rate for all8.3 orders. For annual purchase cost, don’t use two different unitcosts for the 8 complete orders and the 0.3 partial orders – usethe lowest (feasible) unit cost for all 8.3 purchase orders basedon the lot size needed for a full truckload.
b-2. Would your supplier selectionchange?
multiple choice 2
Yes
No