Determine Below Questions based on:
Order lot size: 5000 units
Annual Demand: 320000 units
Glass Panel Weight: 12 lbs
Order processing cost: $155 per order
Inventory carrying rate: 12% per year
Unit Price 1 to 2000 units/order Supplier 1: $50 Supplier 2: $45
Units Price 2001 to 2999 units/order 1: $45 2: $43
Unit Price 3000+ units/order 1: $40 2: $39
Tooling Cost 1: $10000 2: $16000
Distance 1: 200 miles 2: 250 miles
Supplier Defect Rate 1: 4% 2: 2%
Truckload TL(greater/equal) 40,000 lbs : $1.25 per ton-mile
Less-than-truckload: $2.05 per ton-mile
Note: per ton-mile: 2000 lbs per mile
1. Will you use truckload or less than truckload rates?
2. How much is the transportation cost (for both)?
3. Which Supplier has a lower combined tooling and quality cost?
4. How much would you save by choosing the correct supplier (based on Question 3)?