Table 14.1 Alison's Accessories Is a High Volume Worldwide Fashion House with House

question 1

Multiple Choice

Table 14.1
Alison's Accessories is a high volume worldwide fashion house with outlets in 65 countries. Kalil, the supply chain manager is conducting her usual thorough analysis of her final four candidates for supplier and has developed the following tables of pertinent costs and other shipping metrics. Regardless of supplier, Alison's Accessories will operate 220 days per year and has forecast annual demand of 250,000 units. Kalil has obtained quotes for three different shipment sizes (Freight Costs table) . All costs are in US Dollars.
Unit costs

Freight Costs

Other Costs

-Use Table 14.1 to answer the question. As shipping volume increases from 15,000 to 25,000 to 50,000, which supplier experiences the smallest percentage increase in inventory cost?

• A) Supplier A
• B) Supplier B
• C) Supplier C
• D) Supplier D

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Definitions:

MR>MC

A condition where marginal revenue (MR) exceeds marginal costs (MC), indicating a potential profit increase if production is expanded.

Increase Production

A process of ramping up the quantity of goods produced, often in response to higher demand or to achieve economies of scale.

Firm Should

A recommendation or strategy that a business organization is advised to follow in order to optimize performance, achieve objectives, or address specific challenges.

MR<MC

A condition in microeconomics indicating that the marginal revenue is less than the marginal cost, suggesting a decrease in profit if production is increased.