John Morton, director of materials management for Computer Products Corporation CPC) in San Jose, is now reviewing next year's plans for the supply of a component that is now purchased from Osiega Ltd., a company in Japan. The component is the PS100 power supply assembly that is used in many of CPC's products.
CPC pays the supplier more than $7 million per year for these units, and John wonders if money could be saved by developing another supplier for this component or if CPC should gear up to manufacture the power supply assemblies in-house within one of the CPC's own production plants.
John's purchasing-analysis staff has developed the following estimates:
The purchasing-analysis group has learned that CPC will need about 550,000 of the PS100 units next year.
a. Which supply source provides the least cost for next year?
b. How many PS100 units would have to be bought next year for each of the sources to be the least-cost source?
Definitions:
Market Rate of Return
The average rate of return on investments expected by investors in the market.
Annual Dividend
The total dividend payment a company decides to distribute to its shareholders annually.
Share
Represents an ownership portion in a corporation and entitles the holder to a part of the company's profits and assets.
Annual Dividend
The total dividend payments a company makes to its shareholders in one fiscal year.
Q2: A local legal aid office provides
Q12: A value chain can be considered a
Q13: The facility location decision must attempt to
Q16: In a perfectly balanced assembly line, no
Q26: Which of the following is not a
Q34: The process of customers leaving one waiting
Q39: Describe how the following criteria are applied
Q46: List the many questions that must be
Q53: Dell Computer would best be described as
Q54: Employee satisfaction might be considered as a