Use the Following to Answer the Questions Below

Use the following to answer the questions below.
The Steele Bike Company assembles bicycles for a major retail toy outlet.The main purchase is bicycle frames for making these bicycles.Dan Steele,the owner,wants to locate a low-cost supplier for the frames used in this assembly operation.The supplier will be selected based on total annual cost to supply Steele's needs.Annual requirements are for 100,000 frames,and the company operates 200 days a year.Two suppliers,Acme and State,have quoted the same price for the frames,but quantities,lead times and shipping costs are considerably different.The following data are available for the two suppliers.

-Refer to the instruction above.Based on your Total Cost Analysis,which supplier should be selected if the lower cost supplier is chosen?

A) Acme
B) State
C) Since the costs are the same,either supplier could be selected.
D) More information is needed to answer this question.

Correct Answer:

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