Business
Business, 22.10.2019 19:00, ToxicMonkey

Abuyer received bids and other relevant information from two suppliers for a vital component part for its latest product. given the following information, use a total cost analysis to determine which supplier should be chosen. late delivery of the component results in 35 percent lost sales and 65 percent back orders of finished goods. order lot size 2500 units annual demand 62,500 units weight per part 15 lbs order processing cost 25 $/order inventory carrying rate 25 %/year cost of working capital 30 %/year profit margin 20 %/unit price of finished goods 200 $/unit backorder cost 10 $/unit supplier 1 is located 250 miles away. they have a quality rating of 1.5% and a delivery rating of 3%. the terms they offer are 1%15, net 30. the unit cost from supplier 1 is $30 per unit. supplier 2 is located 200 miles away. they have a quality rating of 2% and a delivery rating of 2%. the terms they offer are 2%10, net 30. the unit cost from supplier 2 is $32 per unit. assume 365 days/year. note: per ton-mile = 2,000 pounds per mile for shipping the costs are: truckload (tl ≥ 40,000 lbs): $0.90 per ton-mile less-than-truckload (ltl): $1.22 per ton-mile how much do the best choice of payment terms save the firm when using supplier 2? (round to the nearest whole number) a. none of these b. $49,315 c. $46,233 d. $56,438 e. $41,866

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