Northcutt manufactures high-end racing bikes and is looking for a source of gear sprocket sets. Northcutt would need 1,550 sets each month. Supplier A is a domestic firm, Suppliers B and C are located overseas. Cost information for each supplier is as follows:
Supplier A: Price of $100 per set, plus packing cos of $3.50 per set. Total inland freight costs for all 1,550 units would be $800 per month.
Supplier B: Price of $96 per set, plus packing cost of $3.50 per set. International transportation costs would total $3,500 per month, while total inland freight costs would be $800 per month for all 1,550 units.
Supplier C: Price of $93 per set, plus packing cost of $3.00 per set. International transportation costs would total $5,000 per month, while total inland freight costs would be $1,000 per month for all 1,550 units.
Calculate total landed costs per unit and per month for the three potential suppliers. Who is the cheapest? Who is the most expensive?