Describe quantities would your supplier selection change, Operation Management

Assignment Help:

Your company assembles five different models of a motor scooter that is sold in specialty store 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 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 has been collected

Requirements (annual forecast) = 12,000 Units

Weight per engine = 22 pounds

Order processings cost = $125 per order

Inventory carry cost = 20 percent of the average value of inventory per year

Note: Assume that half of lot size is in inventory on average (1,000/2= 500units)

Two qualified suppliers have submitted the following quatations:

Unit Price Supplier 1 Supplier 2

1 to 999 units/order $510 $505

1,000 to 2,999 500 498

3,000 + 490 488

tooling costs $22,000 $20,000

Distance 125Miles 100Miles

Your assistant has obtained the following freight rates from your carrier:

Truckload (40,000 each load): $0.80 per ton-mile

Less-Than-Truckload: $1.20 per ton-mile

A.) Perform a total cost of ownership analysis and select a supplier.

B.) If you could move the lot size up to ship in truckload quantities would your supplier selection change?


Related Discussions:- Describe quantities would your supplier selection change

How much dollars of pipeline inventory will be in transit, Prince Electroni...

Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centres in different regions of the country. For one of its products, a high-speed modem pric

Capacity planning and controlling, #theories and techniques can help if app...

#theories and techniques can help if applies properly.

Describe at least two major strengths and two major weakness, Thoroughly ex...

Thoroughly explain at least two major strengths and two major weakness of united airlines

Ethics and aids in the workplace, Henry Goldstone, head of Human Resources ...

Henry Goldstone, head of Human Resources for African Gold, Inc. in South Africa, examined the stack of newspaper and business magazine clippings on his desk.  In the last few weeks

Explain turnover and low retention among expatriate employee, Utilizing Tex...

Utilizing Textbook Concepts Answer ALL of the Questions Below: 1. based on what you've learned this semester, why do you think there is high turnover and low retention among expatr

Define how the data resource management methods need, Discuss how the data ...

Discuss how the data resource management methods of today will need to evolve as more types of data emerge. Why the role of a data steward is considered innovative? Explain.

Explain the managerial process, The Managerial Process text. Given the proj...

The Managerial Process text. Given the project network provided, compute the early, late, and slack times for the project. Share your calculations and explain how you came up with

Explain which if any of the resources are over allocated, 1. Which if any o...

1. Which if any of the resources are over allocated? 2. Assume that the project is time constrained and try to resolve any over allocation problems by levelling slack. What happ

Describe several advantages of linear programming, Discuss several advantag...

Discuss several advantages of linear programming; clearly explain the reasons for your choices.

Explain points-based incentive program, Like other large airlines, Global A...

Like other large airlines, Global Airlines has a points-based incentive program. Customers who who join Global's FreeMiles program earn points by purchasing tickets from Global or

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd