(Solution) - A purchasing manager is deciding whether to purchase a component -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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A purchasing manager is deciding whether to purchase a component part from one of two suppliers. Both suppliers offer the part with the same quality, and there is no difference between the suppliers in terms of delivery schedules and delivery dependability. However, the unit prices and the payment windows quoted by the suppliers are different. The relevant information is as follows:

The company?s annual cost of capital is estimated to be 20 percent. Conduct a price analysis to identify the better supplier in terms of price.