1. The following activities were caused from dealing with Mace company, one of y
ID: 2382751 • Letter: 1
Question
1. The following activities were caused from dealing with Mace company, one of your major suppliers.
Activity
Costs
Purchase price
$1,000
Billing costs
100
Inspection costs
250
Late delivery costs
100
Conversion costs mostly labor
100
The Vendor Performance Index for Mace is
A. 1.45
B. 1.5
C. 1.55
D. 1.4
E. none of the above
2. Using the data from the previous question, if you purchased $20,000 in parts from Mace what is the real cost to your company of buying from Mace
A. 20000
B. 24000
c. 29000
D. 30000
E none of the above
Explanation / Answer
SPI = (Purchase Price + Nonperformance Cost) / Purchase Price ie SPI = (1000+100+250+100+100)/1000 = 1550/1000 = 1.55 ...........Ans (C) The Closer SPI Is To 1, The Better The Supplier is.
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