Question
1
Your company makes snow blowers and this
winter they have been selling very well.
You are evaluating a quote from a supplier for engines that power your
snow blowers. The quote is as follows:
|
|
Supplier 1 |
|
Price |
$90 |
|
Terms |
2% 10 Net 45 |
|
Distance |
200 |
|
Order quantity |
1500 |
|
Weight |
20 lbs |
|
Tooling |
$25000 |
|
Quality Failures |
3% |
Assume
the following:
Annual volume for engines is expected to be
90,000 units
Inventory holding rate is 25%
Cost to place an order is $100
Working capital costs are 12%
Your freight rate is $1.75 per ton mile for
a full truckload (40,000 lbs) and $2.00 for a less-than-truckload shipment
There are 365 days in a year.
Late-delivery costs should be ignored.
What
is the total cost of ownership for supplier 1? (Show
your work.)
Question
2
A company using a weighted-criteria
evaluation system has established these 3 categories for supplier evaluation
and the appropriate weight are in parentheses: Quality(0.50), Technology(0.20),
Cost(0.30).
The scores for each category for Company A
are: Quality(90), Technology(75), Cost(60)
The scores for each category for Company B
are: Quality(80), Technology(95), Cost(90)
The scores for each category for Company C
are: Quality(90), Technology(80), Cost(95)
Calculate the weight score for each
supplier? Which supplier would you consider your top supplier? Based on our
discussion in class, what category would you place the suppliers? (Show your work.)
