Grano BV and Henco BV manufacture fairly similar remote-controlled toy cars. Sido BV, a retailer of children’s toys, expects to buy and sell 4000 of these cars each year. Both Granoand Henco can supply all of Sido’s needs and Sido prefers to use only one supplier for these cars. An electronic link will make ordering costs negligible for either supplier. Sido wants 80 cars delivered 50 times each year. Sido obtains the following additional information. Grano Henco Purchase price of the car $ 50 $ 49 Relevant incremental carrying costs of insurance, materials $ 11 $ 10 handling, breakage, etc. , per car per year Expected number of stockouts per year resulting from late 20 cars 150 cars deliveries Stockout costs per car $ 25 $ 26 Expected number of cars sold that will be returned owing to 40 cars 140 cars quality and other problems Additional costs to Sido of handling cach returned car $ 21 $ 21 Inspection costs per delivery $ 20 $ 28 Sido requires a rate of return of 15% per year on investments in stock Required: Which supplier should Sido choose? Why? Show all calculations ?????? ??? …
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