Northcutt manufactures high-end racing bikes and is looking for a source of gear

Question

Northcutt manufactures high-end racing bikes and is looking for a source of gear sprocket sets. Northcult would need 1,800 sets a month Supplier A is a domestic firm, and Suppliers B and C are located overseas Cost information for the suppliers is as follows Supplier A Price of $140 per set, plus packing cost of $1.50 per set. Total inland freight costs for all 1,800 units would be $850 per month. Supplier B-Price of $84 per set, plus packing cost of $1.00 per set. International transportation costs would total $3,400 per month, while total inland freight costs would be $1,000 per month. Supplier C-Pric of $54 par set, plus packing cost of 55.00 per set. International transportation costs would total 54,900 per month, while total inland freight costs would be 900 per month. The total landed cost per unit for Supplier A is s(Enter your response rounded to two decimal places) The total landed cost per month for Supplier A is (Enter your response as a whole number) The total landed cost per unit for Supplier B is (Enter your response rounded to tvo decimal piaces) The total landed cost per month for Supplier B is S (Enter your response as a whole nunter) The total landed cost per unit for Supplier C is sEnter your resoonse rounded to two decimal places.) The total landed cost per month for Supplior C is (Enter your response as a whole number,) Supplier | is the least expensive. Supplier is the most expensive. b. Suppose that international and inland freight costs are foxed for volumes up to 4,000 units a month. Supplier has the lowest landed cost if demand was cut in half. Supplier has the lowest landed cost if demand is doubled. The landed cost of Supplier ' is most sensitive to volume changes

Explanation / Answer

Total landed cost per unit for A
=Price per unit + Packaging cost per unit + Inland freight cost per unit (Total freight cost/number of units)
=140+1.50+(850/1800)
= $141.97
Total landed cost per month for A = $143.62*1800 = $255546

Total landed cost per unit for B
=Price per unit + Packaging cost per unit + Inland freight cost per unit (Total freight cost/number of units) +Intnl transport cost per unit (Total cost/number of units)
=84+1+(1000/1800)+(3400/1800)
= $87.44

Total landed cost per month for B = $87.44*1800 = 157392

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