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 companyuses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the comingyear. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,250 units.Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agreeto 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 engineOrder processing costInventory carry cost15,000 units33 pounds$120 per order20 percent of the average value of inventory per yearNote: Assume that half of lot size is in inventory on average (1,250/2 = 625 units).Two qualified suppliers have submitted the following quotations:SUPPLIER 1SUPPLIER 2ORDER QUANTITY1 to 1,499 units/order1,500 to 2,999 units/order3,000 + units/orderTooling costsDistanceUNIT PRICE UNIT PRICE$594$590586590582580$28,940135 miles$26,900100 milesYour assistant has obtained the following freight rates from your carrier:Truckload (54,000 lbs. each load):Less-than-truckload:$0.80 per ton-mile$1.20 per ton-mile Note: Per ton-mile = 2,000 Ibs. per mile.a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.)Supplier 1Supplier 2Total costa-2. Which supplier would you select?Supplier 2Supplier 1b-1. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier. (Do not roundintermediate calculations. Round "Required lot size for truckload" and final answers to the nearest whole number.)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 annualpurchase cost, don't use two different unit costs for the 8 complete orders and the O.3 partial orders – use the lowest (feasible) unitcost for all 8.3 purchase orders based on the lot size needed for a full truckload.

Number of orders = 15000/1250 = 12 Holding cost = 625*(594 or 590) *0.2 Equipment cost as given in…

a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) Supplier 1 Supplier 2 Total cost a-2. Which supplier would you select? Supplier 2 Supplier 1 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.)

a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) Supplier 1 Supplier 2 Total cost a-2. Which supplier would you select? Supplier 2 Supplier 1 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.)

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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