Carrie Construction (CC) is a company specializing in building airport runways and major highways. As a part of its business, it receives supplies of aggregate (stone, sand, gravel, and so on) from two suppliers: Austin Aggregate and Granger Materials. The CC purchasing department has a preference for buying from Granger based on price but occasionally has to order from Austin when Granger cannot fill the order. Carrie Construction has recently had problems with the quality and the timeliness of deliveries. When a supplier delivers a load to CC, it goes through an initial inspection to assure it meets specification. If the load fails the initial inspection, it goes through a secondary inspection to determine the exact issue. Almost always, the issue can be resolved and the load can be used. The initial inspection costs $3,000 per load. A secondary inspection, which is more thorough, costs $15,000 per load. If a delivery is delayed, Carrie has to hire temporary workers or pay overtime to some employees. The average cost of a delayed load is $6,000. The following are summary statistics from last year's purchases from the two suppliers: Granger Materials Austin Aggregate Number of loads 600 150 Average tons per load 5,000 10,000 Average price per ton $ 7.20 $ 8.00 Number of initial inspections passed 450 141 Number of delayed deliveries 120 15 Required: Calculate the effective cost of a ton of aggregate from the two suppliers, assuming that last year's experience is representative. Note: Round "Average effective cost per ton" answers to 2 decimal places.
Carrie Construction (CC) is a company specializing in building airport runways and major highways. As a part of its business, it receives supplies of aggregate (stone, sand, gravel, and so on) from two suppliers: Austin Aggregate and Granger Materials. The CC purchasing department has a preference for buying from Granger based on price but occasionally has to order from Austin when Granger cannot fill the order.
Carrie Construction has recently had problems with the quality and the timeliness of deliveries. When a supplier delivers a load to CC, it goes through an initial inspection to assure it meets specification. If the load fails the initial inspection, it goes through a secondary inspection to determine the exact issue. Almost always, the issue can be resolved and the load can be used. The initial inspection costs $3,000 per load. A secondary inspection, which is more thorough, costs $15,000 per load. If a delivery is delayed, Carrie has to hire temporary workers or pay overtime to some employees. The average cost of a delayed load is $6,000.
The following are summary statistics from last year's purchases from the two suppliers:
| Granger Materials | Austin Aggregate | |
|---|---|---|
| Number of loads | 600 | 150 |
| Average tons per load | 5,000 | 10,000 |
| Average price per ton | $ 7.20 | $ 8.00 |
| Number of initial inspections passed | 450 | 141 |
| Number of delayed deliveries | 120 | 15 |
Required:
Calculate the effective cost of a ton of aggregate from the two suppliers, assuming that last year's experience is representative.
Note: Round "Average effective cost per ton" answers to 2 decimal places.
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