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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 suppiler 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 1,300 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 Note: Assume that half of lot size is in inventory on average (1.300/2-650 units). Two qualified suppliers have submitted the following quotations: ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000 units/order Tooling costs Distance 15,000 units 15 pounds $ 200 per order 20 percent of the average value of inventory per year SUPPLIER 1 UNIT PRICE $636 Total cost 631 $23,700 120 miles SUPPLIER 2 UNIT PRICE $634 634 $21,700 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (41,000 lbs. each load): Less-than-truckload: 50.00 per ton-mile $1.20 per ton-mile Note: Perton-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 2

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 suppiler 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 1,300 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 Note: Assume that half of lot size is in inventory on average (1.300/2-650 units). Two qualified suppliers have submitted the following quotations: ORDER QUANTITY 1 to 1,499 units/order 1,500 to 2,999 units/order 3,000 units/order Tooling costs Distance 15,000 units 15 pounds $ 200 per order 20 percent of the average value of inventory per year SUPPLIER 1 UNIT PRICE $636 Total cost 631 $23,700 120 miles SUPPLIER 2 UNIT PRICE $634 634 $21,700 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (41,000 lbs. each load): Less-than-truckload: 50.00 per ton-mile $1.20 per ton-mile Note: Perton-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 2

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter3: Introduction To Optimization Modeling
Section3.8: A Multiperiod Production Model
Problem 22P
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Can you assit me with Chapter 16 Problem 8. I do not understand the process. Thank you 

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 1,300 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 Note: Assume that half of lot size is in Inventory on average (1.300/2=650 units). Two qualified suppliers have submitted the following quotations: 1,500 to 2,999 units/order 3,000 units/order Tooling costs Distance 15,600 units 15 pounds $ 200 per order 28 percent of the average value of inventory per year Total cost SUPPLIER 1 UNIT PRICE $ 636 632 631 $23,700 120 miles SUPPLIER 2 UNIT PRICE $ 634 634 630 $21,700 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (41,000 lbs. each load): Less-than-truckload: $0.80 per ton-mile $1.20 per ton-mile Note: Per ton-mile = 2,000 lbs. per mille. a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) Supplier 1 Supplier 2
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 1,300 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 Note: Assume that half of lot size is in Inventory on average (1.300/2=650 units). Two qualified suppliers have submitted the following quotations: 1,500 to 2,999 units/order 3,000 units/order Tooling costs Distance 15,600 units 15 pounds $ 200 per order 28 percent of the average value of inventory per year Total cost SUPPLIER 1 UNIT PRICE $ 636 632 631 $23,700 120 miles SUPPLIER 2 UNIT PRICE $ 634 634 630 $21,700 100 miles Your assistant has obtained the following freight rates from your carrier: Truckload (41,000 lbs. each load): Less-than-truckload: $0.80 per ton-mile $1.20 per ton-mile Note: Per ton-mile = 2,000 lbs. per mille. a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.) 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. (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. Total cost Supplier 1 Yes O No Supplier 2 b-2. Would your supplier selection change?
Transcribed Image Text: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. Total cost Supplier 1 Yes O No Supplier 2 b-2. Would your supplier selection change?
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