Face-to-Face: Total Cost of ownership (TCO) Example 2 infermation . Ordered in l
ID: 399503 • Letter: F
Question
Face-to-Face: Total Cost of ownership (TCO) Example 2 infermation . Ordered in lot sizes of 2000 Annual Forecast 240,000 units weight per engine: 40 pounds Order processing cost: $200/order Inventory Carrying rate: 20% per year Unit Price 1 to 999 units 1000 to 29999 units 3000+ units Tooling cost Distance Supplier Defect Rate Supplier 1 Supplier 2 $205 $190 $185 200 $195 $190 $12,000 $10,000 eDefect Rate l 120 mile%¡ 100 miles Truck load TL 40,000 lbs) $0. 95 per ton-mile Less-than-Truckload (LTL) (Per ton-mile 2000 pounds per mile)Explanation / Answer
Supplier B must be selected due to below reasons:
1. Quality of supplier B is best out of all the suppliers. Since the weight assigned to quality is maximum, i.e. 0.35 hence quality is the most important criteria of selecting the supplier. Quality score of supplier B is 93 whereas that of other suppliers is less in comparison.
2. Delivery score of supplier B is 88 whereas that of other suppliers is 85 and the weightage assigned is 0.15, which shows that supplier B must be selected.
3. In terms of order processing, score assigned to supplier B is 97 and the weightage is 0.2. Since supplier B's score is maximum hence it must be selected.
4. Also in terms of customer service, score of supplier B is maximum.
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