Use the Following Information to Determine Which Supplier for Steering

question 25

Essay

Use the following information to determine which supplier for steering wheels is more cost-effective using total cost analysis.Late delivery of the component results in 50% lost sales and 50% back orders of finished goods.
Table 1

Table 2

Here is the freight rates for
Truckload (TL ? 40,000 lbs): $0.90 per ton-mile
Truckload Less-than-truckload (LTL): $1.10 per ton-mile
Note: per ton-mile = 2,000 lbs.per mile; number of days per year = 365

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Definitions:

Critical Path

A project management tool that identifies the sequence of crucial and interdependent steps that comprise a project's longest duration.

PERT Network

Project Evaluation and Review Technique; a project management tool used to schedule, organize, and coordinate tasks within a project.

Organizational Response

The way an organization reacts to internal or external stimuli, challenges, or opportunities.

Technology Leader

An individual or organization pioneering in the development, utilization, and application of new technologies, setting trends in the industry.