# MGT301 Assignment 4

## MGT301 Assignment 4

MGT301 Assignment 4

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Question 1
Your company makes snow blowers and this winter they have been selling very well. You are
evaluating a quote from a supplier for engines that power your snow blowers. The quote is as follows:
Price
Terms
Distance
Order quantity
Weight
Tooling
Quality Failures

Supplier 1
\$90
2% 10 Net 45
200
1500
20 lbs
\$25000
3%

Assume the following:
Annual volume for engines is expected to be 90,000 units
Inventory holding rate is 25%
Cost to place an order is \$100
Working capital costs are 12%
Your freight rate is \$1.75 per ton mile for a full truckload (40,000 lbs) and \$2.00 for a less-thantruckload shipment
There are 365 days in a year.
Late-delivery costs should be ignored.
What is the total cost of ownership for supplier 1? (Show your work.)

1

MGT301, Spring 2016
Assignment 4 – 25 Points

Name_________________________

Question 2
A company using a weighted-criteria evaluation system has established these 3 categories for supplier
evaluation and the appropriate weight are in parentheses: Quality(0.50), Technology(0.20), Cost(0.30).
The scores for each category for Company A are: Quality(90), Technology(75), Cost(60)
The scores for each category for Company B are: Quality(80), Technology(95), Cost(90)
The scores for each category for Company C are: Quality(90), Technology(80), Cost(95)
Calculate the weight score for each supplier? Which supplier would you consider your top supplier?
Based on our discussion in class, what category would you place the suppliers? (Show your work.)

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