Use the Following to Answer the Questions Below

question 81

Multiple Choice

Use the following to answer the questions below.
The Steele Bike Company assembles bicycles for a major retail toy outlet.The main purchase is bicycle frames for making these bicycles.Dan Steele,the owner,wants to locate a low-cost supplier for the frames used in this assembly operation.The supplier will be selected based on total annual cost to supply Steele's needs.Annual requirements are for 100,000 frames,and the company operates 200 days a year.Two suppliers,Acme and State,have quoted the same price for the frames,but quantities,lead times and shipping costs are considerably different.The following data are available for the two suppliers.

-Refer to the instruction above.What are the annual shipping savings available when comparing the two suppliers?

• A)$25,000
• B)$10,000
• C)$7,500
• D)Shipping costs are the same from either supplier

---

Definitions:

Low-Learning Products

Goods that require minimal effort from consumers to understand and use effectively.

Broaden Distribution

Expanding the availability of a product or service to more locations or channels to reach a wider audience.

Fashion Product

A commodity related to the fashion industry, including clothing, accessories, and footwear, designed to satisfy consumer tastes and preferences.

Life Cycle Curve

A graphical representation of the stages through which a product goes from its introduction to the market through its growth, maturity, and eventual decline.