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If you could move the lot size up to ship in truckload quantities, calculate the total cost for ea ermediate calculations. Round "Required lot size for truckload" and final answers to the nea

If you could move the lot size up to ship in truckload quantities, calculate the total cost for ea ermediate calculations. Round "Required lot size for truckload" and final answers to the nea

Practical Management Science
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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Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company 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 880 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) Weight per engine Order processing cost Inventory carry cost 10,560 units 25 pounds 21e per order 20 percent of the average value of inventory per year Note: Assume that half of lot size is in inventory on average (880/2 = 440 units). Two qualified suppliers have submitted the following quotations: SUPPLIER 1 UNIT PRICE 696 SUPPLIER 2 UNIT PRICE 690 690 ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3, e00 + units/order Tooling costs Distance 684 683 $25,520 130 miles 68e $22,70e 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (52, eee lbs. each load): Less-than-truckload: se.80 per ton-mile $1.20 per ton-mile Note: Per ton-mile = 2,000 Ibs. per mile.
Transcribed Image Text:Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company 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 880 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) Weight per engine Order processing cost Inventory carry cost 10,560 units 25 pounds 21e per order 20 percent of the average value of inventory per year Note: Assume that half of lot size is in inventory on average (880/2 = 440 units). Two qualified suppliers have submitted the following quotations: SUPPLIER 1 UNIT PRICE 696 SUPPLIER 2 UNIT PRICE 690 690 ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3, e00 + units/order Tooling costs Distance 684 683 $25,520 130 miles 68e $22,70e 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (52, eee lbs. each load): Less-than-truckload: se.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 1 Supplier 2 Total cost 19,800 Os 15,840 O 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.) 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 annual purchase cost, don't use two different unit costs for the 8 complete orders and the 0.3 partial orders - use the lowest (feasible) unit cost for all 8.3 purchase orders based on the lot size needed for a full truckload. Supplier 1 Supplier 2 Total cost 13,200 OS 10,560
Transcribed Image Text:a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) Supplier 1 Supplier 2 Total cost 19,800 Os 15,840 O 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.) 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 annual purchase cost, don't use two different unit costs for the 8 complete orders and the 0.3 partial orders - use the lowest (feasible) unit cost for all 8.3 purchase orders based on the lot size needed for a full truckload. Supplier 1 Supplier 2 Total cost 13,200 OS 10,560
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