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 700 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 costORDER QUANTITY1 to 1,499 units/order1,500 to 2,999 units/order3,000+ units/orderNote: Assume that half of lot size is in Inventory on average (700/2=350 units).Two qualified suppliers have submitted the following quotations:Tooling costsDistanceTruckload (42,000 lbs. each load):Less-than-truckload:Total cost8,400 units25 pounds$ 180 per orderO Supplier 1O Supplier 220 percent of the average value of inventory per yearYour assistant has obtained the following freight rates from your carrier:a-2. Which supplier would you select?SUPPLIER 1UNIT PRICE$ 672660534$24,880130 milesTotal costNote: Per ton-mile = 2,000 lbs. per mile.a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.)Supplier 1Supplier 2Supplier 1SUPPLIER 2UNIT PRICE$ 666666530$22,100100 miles$0.80 per ton-mile$1.20 per ton-mileb-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 0.3 partial orders - use the lowest (feasible) unitcost for all 8.3 purchase orders based on the lot size needed for a full truckload.Supplier 2

Lot size = 700 Annual requirement = 8400 units Ordering cost = $180 per order Inventory carrying…

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 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 700 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 ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000+ units/order Tooling costs Distance Note: Assume that half of lot size is in Inventory on average (700/2=350 units). Two qualified suppliers have submitted the following quotations: Total cost 8,400 units O Supplier 1 O Supplier 2 25 pounds $ 180 per order 20 percent of the average value of inventory per year SUPPLIER 1 UNIT PRICE $ 672 660 534 Your assistant has obtained the following freight rates from your carrier: Truckload (42,000 lbs. each load): Less-than-truckload: a-2. Which supplier would you select? $24,880 130 miles Total cost Note: Per ton-mile = 2,000 lbs. per mile. a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) Supplier 1 Supplier 1 Supplier 2 SUPPLIER 2 UNIT PRICE $ 666 666 530 $22,100 100 miles $0.80 per ton-mile $1.20 per ton-mile 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 2