Delph Manufacturing Company is going to purchase an auto parts component from one of two competing suppliers. Delph is going to base its decision, in part, on the supply chain performance of the two suppliers. The company has obtained the following data for average raw materials, work-in-process, and finished goods inventory value, as well as cost of goods sold for the suppliers
Supplier 1
Supplier 2
Cost of Goods Sold
$8,360,000.00
$14,800,000.00
Raw Materials
$275,000
$870,000.00
Work-in-Progress
$62,000.00
$550,000.00
Finished Goods
$33,000.00
$180,000.00
Each company operates 52 weeks per year.
Determine which supplier has the best supply chain performance according to inventory turns and weeks of supply.
What other factors would the company likely take into account in selecting a supplier?