This is one question from my homework assignment. I specifically need help with (A) creating a total cost of ownership analysis.

Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,000 each. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:

Requirements (annual forecast)
Weight per engine
Order processing cost
Inventory carry cost
12,000 units
22 pounds
$125 per order
20 percent of the average value of inventory per year
Note: Assume that half of lot size is in inventory on average (1,000/2 5 500 units).
Two qualified suppliers have submitted the following quotations:
Order Quantity
Supplier 1
Unit Price
1 to 1,499 units/order $510.00
1,500 to 2,999 units/order 500.00
3,0001 units/order 490.00
Tooling costs $22,000
Distance 125 miles
Supplier 2
Unit Price
1 to 1,499 units/order $505.00
1,500 to 2,999 units/order 505.00
3,0001 units/order 488.00
Tooling costs $20,000
Distance 100 miles

Your assistant has obtained the following freight rates from your carrier:
Truckload (40,000 lbs. each load):
Less-than-truckload:
$0.80 per ton-mile
$1.20 per ton-mile
Note: Per ton-mile 5 2,000 lbs. per mile.

a. Perform a total cost of ownership analysis and select a supplier.
b. Would it make economic sense to order in truckload quantities? Would your supplier selection change if you ordered truckload quantities?

Solution Summary

What is the optimum number of engines to order given the total cost of ownership?

If D = 9,000 per month, S = $45 per order, and H = $2 per unit per month, what is the economicorderquantity?
Round your answer to the nearest whole number; for example, 1234. Please show your work.

A bakery uses 700 bags of flour per week and works 45 weeks per year. The flour costs $25 per bag. Each time that order is issued it will cose the bakery $100. Carrying costs of the inventory are 15% of unit costs. Determine the economicorderquantity, reorder point, and the average inventory for this bakery.

Sales are estimated to be 4,500 (d) units annually at $3,000 each. The cost of each unit for Taylor Incorporated is $1,200 (v). Inventory carrying cost is (c) 5% of the cost value of the device. Order placement (p) cost is $60.
I need to know the EconomicOrderQuantity (EOQ).
I already have the equation I just not sure

Lakefield Ice Ltd. sells 25,000 windows per year. The carrying cost per window is $3.70. Currently they order 1,000 windows at a time with a fixed cost per order of $38. If they switch to using economicorderquantity, how much can they reduce their total inventory costs?

Lott Manufacturing Inc. has been ordering parts for its production process in lots of 10,000 units. Each order costs the firm $50 to place, and holding costs per unit average $3. Lott uses 200,000 units every 250 days.
Lott Manufacturing was recently approached by its supplier with a new quantity discount program. The supplie

As the production manager, you need to minimize both ordering and inventory costs. You need to provide a recommendation of the optimal orderquantity of raw materials to your plant manager. Your objective is to determine the economicorderquantity (EOQ). If the annual demand for Ultamyacin at Wallingford is 400,000 units, the a

Assume that the market demand and the market supply are governed by the following equations:
Qd=80-4P
Qs=6P
(i) Is the demand consistent with the law of demand?
(II) Is the supply consistent with the law of supply?
(iii) What would be the equilibrium price and quantity in this market?

Apply the EOQ model to the following quantity discount situation in which D=500 units per year, C0=$40, and the annual holding cost rate is 20%. What orderquantity do you recommend?
Discount Category Order Size Discount (%) Unit Cost
1 0 to 99 0

For each of the following independent cases, use the equation method to compute the economicorderquantity.
Case A Case B Case C
Annual requirement (in units) ................................................ 13,230 1,681