$22,500 22.700 22,300 |go to one of the company's two warehouses. In add
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Please see the attachment, thank you! Cheers!
![6.5. The Audiofile Company produces boomboxes. However, management has decided to subcontract out the production of the speakers needed for the boomboxes. Three vendors are available to supply the speakers. Their price for
Page 232
each shipment of 1,000 speakers is shown below.
Vendor
Price
1
$22,500
2
22,700
3
22,300
Each shipment would go to one of the company's two warehouses. In addition to the price for each shipment, each vendor would charge a shipping cost for which it has its own formula based on the mileage to the warehouse. These formulas
and the mileage data are shown below.
Vendor
Charge per Shipment
Warehouse 1
Warehouse 2
1
$300 + 40¢/mile
1,600 miles
400 miles
2
$200 + 50¢/mile
500 miles
600 miles
3
$500 + 20¢/mile
2,000 miles
1,000 miles
Whenever one of the company's two factories needs a shipment of speakers to assemble into the boomboxes, the company hires a trucker to bring the shipment in from one of the warehouses. The cost per shipment is given next, along with the
number of shipments needed per month at each factory.
Unit Shipping Cost
Factory 1 Factory 2
Warehouse 1
$200
$700
Warehouse 2
400
500
Monthly demand
10
6
Each vendor is able to supply as many as 10 shipments per month. However, because of shipping limitations, each vendor is only able to send a maximum of six shipments per month to each warehouse. Similarly, each warehouse is only able to
send a maximum of six shipments per month to each factory.
Management now wants to develop a plan for each month regarding how many shipments (if any) to order from each vendor, how many of those shipments should go to each warehouse, and then how many shipments each warehouse should
send to each factory. The objective is to minimize the sum of the purchase costs (including the shipping charge) and the shipping costs from the warehouses to the factories.
c. Formulate and solve a spreadsheet model for the company's problem.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff26ed775-abd0-40fe-a9a8-48e7407dd25a%2F86291e9e-7abf-4271-94eb-4f2d11cc0b5f%2F1wxwbfn_processed.png&w=3840&q=75)
Transcribed Image Text:6.5. The Audiofile Company produces boomboxes. However, management has decided to subcontract out the production of the speakers needed for the boomboxes. Three vendors are available to supply the speakers. Their price for
Page 232
each shipment of 1,000 speakers is shown below.
Vendor
Price
1
$22,500
2
22,700
3
22,300
Each shipment would go to one of the company's two warehouses. In addition to the price for each shipment, each vendor would charge a shipping cost for which it has its own formula based on the mileage to the warehouse. These formulas
and the mileage data are shown below.
Vendor
Charge per Shipment
Warehouse 1
Warehouse 2
1
$300 + 40¢/mile
1,600 miles
400 miles
2
$200 + 50¢/mile
500 miles
600 miles
3
$500 + 20¢/mile
2,000 miles
1,000 miles
Whenever one of the company's two factories needs a shipment of speakers to assemble into the boomboxes, the company hires a trucker to bring the shipment in from one of the warehouses. The cost per shipment is given next, along with the
number of shipments needed per month at each factory.
Unit Shipping Cost
Factory 1 Factory 2
Warehouse 1
$200
$700
Warehouse 2
400
500
Monthly demand
10
6
Each vendor is able to supply as many as 10 shipments per month. However, because of shipping limitations, each vendor is only able to send a maximum of six shipments per month to each warehouse. Similarly, each warehouse is only able to
send a maximum of six shipments per month to each factory.
Management now wants to develop a plan for each month regarding how many shipments (if any) to order from each vendor, how many of those shipments should go to each warehouse, and then how many shipments each warehouse should
send to each factory. The objective is to minimize the sum of the purchase costs (including the shipping charge) and the shipping costs from the warehouses to the factories.
c. Formulate and solve a spreadsheet model for the company's problem.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 5 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education