Supplier Relationship Process Assignment | Top Essay Writing
February 18th, 2020
- Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a circuit board supplier for a new phone soon to be introduced to the market. The annual requirements are 50,000 units and Horizon’s plant operates 250 days per year. The data for three suppliers are in Table 14.3.
Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular?
Table 14.3 Data for Suppliers to Horizon Cellular
| Supplier | Annual Freight Costs Shipping Quantity | Price/Unit | Annual Holding Cost/Unit | Lead Time (Days) | Annual Administrative Cost | |
| 10,000 | 20,000 | |||||
| Abbott | $10,000 | $7,000 | $30 | $6.00 | 4 | $10,000 |
| Baker | $12,000 | $9,000 | $28 | $5.60 | 7 | $12,000 |
| Carpenter | $9,000 | $6,500 | $31 | $6.20 | 3 | $9,000 |
Expert Answer
Answer: Baker and a shipping quantity of 20,000 units is the lowest cost alternative, with annual total costs to Horizon Cellular of $1,484,840. Solution: Annual total costs are calculated as; Get Operations Management homework help today
