Business, 25.12.2020 19:50 nimclean

The Burdell Wheel and Tire Company assembles tires to wheel rims for use on cars during 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 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 are available for two suppliers being considered. SUPPLIER SHIPPING QUANTITY PER SHIPMENT SHIPPING COSTS PRICE / TIRE (p) INVENTORY HOLD COSTS (H) LEAD TIME (DAYS) ADMIN. COSTSLEXINGTON TIRE2,000 $18,000 $30 $6.00 6 $15,000IRMO AUTO1,000 $25,000 $29 $5.80 4 $18,000Using the Total Cost Analysis for Supplier Selection, which supplier should Burdell choose? Provide details to justify your answer.

Answers: 1

Show answers

Answers

LEXINGTON TIRE provides a higher unit cost but, a lower inventory cost overall considering the ordering, holding cost, and administrative cost generated.

The company should pick LEXINGTON TIRE

Explanation:

LEXINGTON TIRE

SHIPPING QUANTITY PER SHIPMENT 2,000

SHIPPING COSTS 18,000

PRICE per TIRE 30

INVENTORY HOLD COSTS (H) 6.00

LEAD TIME (DAYS) 6

ADMIN. COSTS 15,000

Total cost: 25,000 / 2,000 = 12.5 per year

shipment cost: $18,000 per shipment x 12.5 per year = 225,000

Materials cost:

25,000 tires x $30 per tire = 750,000

Holding cost:

lead time + average inventory

6 days x 100 tires + 2,000 tires / 2 = 1,600 tires on average

times $6 holding cost = 9,600

Total cost: Inventory 225,000 + 750,000 materials + 9,600 holding + 15,000 admin

total 999,600

IRMO AUTO

SHIPPING QUANTITY PER SHIPMENT 1,000

SHIPPING COSTS 25,000

PRICE per TIRE 29(p)

INVENTORY HOLD COSTS (H) 5.80

LEAD TIME (DAYS) 4

ADMIN. COSTS 18,000

Shipping per year: 25,000 / 1,000 = 25

Ordering cost: 25 shipment x 25,000 = 625,000

Materials:

25,000 x 29 = 725,000

Holding:

lead time + average inventory

4 days x 100 + 1000/2 = 900 units on inventory throughout the year

Holding cost: 900 x $5.80 = 5,220

Total Inventory cost:

Ordering 625,000 + materials 725,000 + 5,220 holding + 18,000 admin

total = 1,355,220

Answer from: Quest

Answer(d)none of the above choices;

Answer from: Quest

You have the right to raise a safety or health concern, or report a work-related injury or illness with your employer or osha without being retaliated against. is this statement true or false? true. now, in some cases an employee may feel they have been retaliated against and if they do, they can file a complain as that is not allowed. if an employer is found to violate safety or health concerns they can get in a lot of trouble and potentially be shut down overtime. it is always important to address concerns and if retaliation happens, address those as well.

Another question on Business

Business, 22.06.2019 08:20

How much does a neurosurgeon can make most in canada? give me answer in candian dollar

Answers: 1

Answer

Business, 22.06.2019 12:20

Over the past decade, brands that were once available only to the wealthy have created more affordable product extensions, giving a far broader range of consumers a taste of the good life. jaguar, for instance, launched its x-type sedan, which starts at $30,000 and is meant for the "almost rich" consumer who aspires to live in luxury. by marketing to people who desire a luxurious lifestyle, jaguar is using:

Answers: 3

Answer

Business, 22.06.2019 16:50

Identify and describe a variety of performance rating scales that can be used in organizations including graphical scales, letter scales, and numeric scales.

Answers: 2

Answer

Business, 23.06.2019 05:10

To use google as main search engine, which internet browser can i use

Answers: 2

Answer

You know the right answer?

The Burdell Wheel and Tire Company assembles tires to wheel rims for use on cars during manufacture...

Questions