1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Vladimir [108]
3 years ago
5

Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The compa

ny 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 1,000 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) 12,000 units
Weight per engine 22 pounds
Order processing cost $125 per order
Inventory carry cost 20 percent of the average value of inventory per year

Assume that half of lot size is in inventory on average (1,000/2 = 500 units).

Two qualified suppliers have submitted the following quotations:

ORDER QUANTITY SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE
1 to 1,499 units/order $510.00 $505.00
1,500 to 2,999 units/order 500.00 505.00
3,000 + units/order 490.00 488.00
Tooling costs $22,000 $20,000
Distance 125 miles 100 miles

Your assistant has obtained the following freight rates from your carrier:

Truckload (40.000 lbs. each load): $0.80 per ton-mile
Less-than-truckload: $1.20 per ton-mile

Required:
a. Calculate the total cost for each supplier.
b. Which supplier would you select?
c. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
d. Would your supplier selection change?
Business
1 answer:
anygoal [31]3 years ago
5 0

Answer:

a. Cost of Supplier 1  : $6,214,300 per year

Cost of Supplier 2 : $6,147,840

b. Supplier 2 will be selected as it costs $66,460 less than supplier 1.

c. 1,818

d. No.

Explanation:

<u>Supplier :     1   ;    2</u>

Unit price : $510 ; $505

Annual Purchase cost: $6,120,000 ; $6,060,000

One time cost: $22,000 ; $20,000

Orders per year: 12 , 12

Order processing cost: $1,500 ; $1,500

Inventory carrying cost: $51,000 ; $50,500

Distance: 125 ; 100

Weight per load: 22000

Transportation: $19,800 ; $15,840

Total Cost : $6,214,300 ; $6,147,840

Annual Purchase Cost = Demand * Units price

Orders per year = Demand / Lot size

Inventory Carrying cost = [ Lot size / 2 ] * Carrying cost * unit price

Order processing cost = Number of orders * order processing cost.

c. Required lot size for truck : 40,000 / 22 ≈ 1,818

You might be interested in
Murphy company produces flash drives for computers, which it sells for $20 each. each flash drive costs $8 of variable costs to
Maurinko [17]

We can find the increase in operating income for each $ 1,000 increase in revenue per month by finding the contribution margin ratio and the multiplying it with the increase operating income of $ 1,000 each.

The formula to find the contribution margin ratio is :-

Contribution margin ratio = Contribution margin per unit / Selling price per unit

= 12 / 20 = 60%

The increase in operating income = Contribution margin ratio * Revenue

= 60 % * 1,000

= $ 600

The calculations are shown below :-

Selling price per unit = $ 20

Variable cost per unit = $ 8

Contribution margin per unit = Selling price per unit - Variable cost per unit

= $ 20 - $ 8 = $ 12

6 0
2 years ago
At 4 percent inflation, how much time will it take for prices to double
Delvig [45]

Answer:

eighteen years is the correct answer.

Explanation:

5 0
3 years ago
The impetus that pushes consumers to satisfy their unmet needs, such as having no laundry detergent to do the wash, is a(n) Blan
TEA [102]

The impetus that pushes consumers to satisfy their unmet needs, such as having no laundry detergent to do the wash, is a motive.

<h3>What is a Motivation?</h3>

This refers to the internal or external drive that makes a person to do something, in hopes of a reward or to escape punishment.

Hence, we can see that based on the drive that is inherent in humans to accomplish a task, this leads them to satisfy their unmet needs and this is known as a motive.

Read more about intrinsic motivation here:

brainly.com/question/15542056

#SPJ1

6 0
1 year ago
What is advertising?
miv72 [106K]

Explanation:

the activity or profession of producing advertisements for commercial products or services.

plz mark it as brainliest

7 0
2 years ago
Read 2 more answers
LO.9 Renata Corporation purchased equipment in 2017 for $180,000 and has taken $83,000 of regular MACRS depreciation. Renata Cor
Pani-rosa [81]

Answer:

It will be considered a long-term capital gains as Renata Corporation holded for a priod of time longer than a year.

The gain will be the difference between tax basis (cost - tax purporse depreciation) which amount to $13,000

Explanation:

selling price           110,000

180,000 - 83,000 = 97,000 tax basis

long.term capital gain 13,000

7 0
3 years ago
Other questions:
  • A fixture is an object that formerly was personal property but has become real property. Of the following four rules for determi
    15·1 answer
  • If you are required to show proof of financial responsibility for the future, for how many years must the proof be kept? 1 year
    7·1 answer
  • Chiquita produces bananas for an average explicit cost of $0.25 per banana and sells 1 million bananas per week for a price of $
    9·1 answer
  • Comanic Corp. has common stock of $5,400,000, retained earnings of $2,000,000, unrealized gains on trading securities of $100,00
    12·1 answer
  • Four years ago, Velvet Purses purchased a mailing machine at a cost of $154808. This equipment is currently valued at $25955 on
    8·1 answer
  • At the beginning of Year 1, a company reported a balance in common stock of $164,000 and a balance in retained earnings of $64,0
    7·1 answer
  • MCQS
    9·1 answer
  • What is one way that critical thinking can help in career exploration?
    6·2 answers
  • Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory
    9·1 answer
  • 1. Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!