Supply chain effects on total relevant inventory cost. Joe’s Deli orders specially-m...

Supply chain effects on total relevant inventory cost. Joe’s Deli orders specially-made sandwich buns from two different suppliers: Gold Star Breads and Grandma’s Bakery. Joe’s Deli would like to use only one of the suppliers in the future. Due to variations in quality, Joe’s would need to inspect 30% of Gold Star’s buns and 60% of Grandma’s. The following data refer to costs associated with the two suppliers.

1. What is the relevant cost of purchasing from Gold Star and Grandma’s?

2. What factors other than cost should Joe’s Deli consider?