CORE Exam Dumps : Supply Management Core Exam

Given Data:

Unit price: $0.40

Annual usage: 80,000 units

Carrying cost: 25%

Minimum order quantity: 20,000 units

Total Purchase Cost:

Unit price multiplied by annual usage: $0.40 * 80,000 = $32,000

Additional Costs:

As the item price is fixed and includes delivery (DDP Incoterms® 2020), there are no additional duties or transportation costs.

Carrying Cost Calculation:

For the minimum order quantity, the carrying cost is not a factor because the question specifies a fixed price per unit delivered.

Conclusion: The total cost of purchasing 80,000 units per year at $0.40 each is $32,000.

References

Incoterms® 2020 by International Chamber of Commerce (ICC).

Supply Chain Management: Strategy, Planning, and Operation by Sunil Chopra.

The Handbook of Logistics and Distribution Management by Alan Rushton, Phil Croucher, and Peter Baker.

Positional bargaining is a negotiation strategy where each side adopts a fixed position and then negotiates to close the gap through concessions and compromise. This approach focuses on maintaining specific demands and making adjustments to reach a mutually acceptable agreement. It contrasts with interest-based bargaining, which focuses on underlying interests rather than fixed positions.

References

Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher and William Ury

Harvard Business Review articles on negotiation tactics

Calculate Total Cost per Supplier: This includes the unit price and shipping costs.

Supplier A: Unit cost is $0.69. Shipping cost is $2000 per 10,000 units.

Total cost per unit: $0.69 + ($2000/10,000) = $0.69 + $0.20 = $0.71 per unit.

Supplier B: Unit cost is $0.71. Shipping cost is $1500 per 10,000 units.

Total cost per unit: $0.71 + ($1500/10,000) = $0.71 + $0.15 = $0.715 per unit.

Compare Landed Prices: The total cost per unit for Supplier A is $0.71, and for Supplier B, it is $0.715.

Decision: Supplier A offers the lower landed price at $0.71 per unit compared to Supplier B’s $0.715 per unit.

References

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.