Question

Nike is evaluating building their own fitness tracker that pairs with their fitness apps. They don't know how many they are going to sell and they don't know which supplier they should choose so they evaluate 2 to make sure they get a good deal. What is the approximate Fixed and Variable Cost for each supplier and which supplier should you choose if you decide that you need 33,000 trackers to start with? Total Amount for that Quantity Supplier A - Total Quantity Requested 20,000 40,000 $642,500 $1,194,880 $2,217,665 80,000 Supplier B - Total Quantity Requested 20,000 40,000 80,000 Total Amount for that Quantity' 631,550 1.264.220 2,399,421 < Supplier A Variable Cost [Choose Supplier A Fixed Cost [Choose Supplier B Variable Cost [Choose ] Supplier Fixed Cost [Choose] Which Supplier should you choose for 33,000 trackers? [Choose)

Answer 1

Answer:

Supplier A Variable cost: $ 15, 75, 165.

Supplier A Fixed cost: $ 6, 42, 500.

Supplier B Variable cost: $ 17, 67, 871.

Supplier B Fixed cost: $ 6, 31, 550.

Which Supplier You Choose for 33,000 Trackers: We need Supplier B for 33,000 Trackers because his cost of Production is Less than Supplier A.

Refer to attached image for details calculations:

Supplier A Total Quantity Total amount for that Quantity (int) 20 000 6,42 50.o. 400OD 11,94,880 80 000 2217665 Variable Cost 1 1194880 - 642500 - 55238 2217665 - 1194880 = 1022785$ = $552,380 +$1022 785 = $1575,165 (2) Fixed cost for A. - $6,42,500 Supplier B Total amount for that Quantity (im 20,000 6,31,550 40,000 12 6 4 220 80,000 2399421 3) Variable cost for B. $6,32 670 Total Quantity + 1964220 - 63.560 2020

2399421 - 1264 220 = (1 35201 Total variable cost for B 1135 201 + 632670 - $ 1767871 y fixed cost for B. & 6,31550. 10 12 15) Cost Cast of 33000 trackers for supplier A 642500 30000 $1060125 20000 19 Cost of 33000 trackers for Supplier B | 631550 30000 20 000 we med supplier B for 33000 tracker to start with because his cast of production is less than