The Burdell Wheel and Tire Company assembles tires on wheel rims for use on cars during the manufacture of vehicles by the automotive industry. Burdell wants to locate a low-cost supplier for the tires he uses in his assembly operation. The supplier will be selected based on the total annual cost to supply Burdell's needs. Burdell's annual requirements are for 25,000 tires, and the company operates 250 days a year. The following data is available for the two suppliers being considered. SUPPLIER SHIPPING QUANTITY PER SHIPMENT Annual SHIPPING COSTS PRICE / TIRE (p) INVENTORY HOLD COSTS (H) LEAD TIME (DAYS) Annual ADMIN. COSTS LEXINGTON TIRE 2,000 $18,000 $30 $6.00 6 $15,000 IRMO AUTO 1,000 $25,000 $29 $5.80 4 $18,000 Using the Total Cost Analysis for Supplier Selection, which supplier should Burdell choose? Provide details to justify your answer. The total costs are calculated as the sum of material costs, freight (shipping) costs, inventory costs, and administrative costs.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
The Burdell Wheel and Tire Company assembles tires on wheel rims for use on cars during the manufacture of vehicles by the automotive industry. Burdell wants to locate a low-cost supplier for the tires he uses in his assembly operation. The supplier will be selected based on the total annual cost to supply Burdell's needs. Burdell's annual requirements are for 25,000 tires, and the company operates 250 days a year. The following data is available for the two suppliers being considered. SUPPLIER SHIPPING QUANTITY PER SHIPMENT Annual SHIPPING COSTS PRICE / TIRE (p) INVENTORY HOLD COSTS (H) LEAD TIME (DAYS) Annual ADMIN. COSTS LEXINGTON TIRE 2,000 $18,000 $30 $6.00 6 $15,000 IRMO AUTO 1,000 $25,000 $29 $5.80 4 $18,000 Using the Total Cost Analysis for Supplier Selection, which supplier should Burdell choose? Provide details to justify your answer. The total costs are calculated as the sum of material costs, freight (shipping) costs, inventory costs, and administrative costs.
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