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 1,000 each. 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) 12,000 units Weight per engine 22 pounds Order processing cost $125 per order Inventory carry cost 20 percent of the average value of inventory per year Note: Assume that half of the lot size is in inventory, on average (1,000 ÷ 2 = 500 units). Two qualified suppliers have submitted the following quotations: ORDER QUANTITY SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE 1 to 1,499 units per order $510.00 $505.00 1,500 to 2,999 units per order 500.00 505.00 3,000 + units per order 490.00 488.00 Tooling costs $22,000 $20,000 Distance 125 miles 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (40,000 pound each load): $0.80 per ton-mile Less-than-truckload: $1.20 per ton-mile Note: Per ton-mile = 2,000 pound per mile. a-1. Calculate the total cost for each supplier. Note: Round your answers to the nearest whole number. a-2. Which supplier would you select? multiple choice 1 Supplier 1 Supplier 2 b-1. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier. Note: Round your "engine quantity" 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. b-2. Would your supplier selection change? multiple choice 2 Yes No
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.
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 1,000 each. 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 |
12,000 | units |
|---|---|---|
| Weight per engine | 22 | pounds |
| Order |
$125 | per order |
| Inventory carry cost | 20 | percent of the average value of inventory per year |
Note: Assume that half of the lot size is in inventory, on average (1,000 ÷ 2 = 500 units).
Two qualified suppliers have submitted the following quotations:
| ORDER QUANTITY | SUPPLIER 1 UNIT PRICE | SUPPLIER 2 UNIT PRICE | ||
|---|---|---|---|---|
| 1 to 1,499 units per order | $510.00 | $505.00 | ||
| 1,500 to 2,999 units per order | 500.00 | 505.00 | ||
| 3,000 + units per order | 490.00 | 488.00 | ||
| Tooling costs | $22,000 | $20,000 | ||
| Distance | 125 | miles | 100 | miles |
Your assistant has obtained the following freight rates from your carrier:
| Truckload (40,000 pound each load): | $0.80 per ton-mile |
|---|---|
| Less-than-truckload: | $1.20 per ton-mile |
Note: Per ton-mile = 2,000 pound per mile.
a-1. Calculate the total cost for each supplier.
Note: Round your answers to the nearest whole number.
a-2. Which supplier would you select?
multiple choice 1
-
Supplier 1
-
Supplier 2
b-1. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
Note: Round your "engine quantity" 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.
b-2. Would your supplier selection change?
multiple choice 2
-
Yes
-
No
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