You have been asked to analyze the bids for 200 polished disks used in solar pan

Question

You have been asked to analyze the bids for 200 polished disks used in solar panels. These bids have been submitted by three suppliers: Thailand Polishing, India Shine, and Sacramento Glow. Thailand Polishing has submitted a bid of 2 comma 200 baht. India Shine has submitted a bid of 2 comma 200 rupee. Sacramento Glow has submitted a bid of $ 220. You check with your local bank and find that $1 = 10 baht and $1 = 8 rupee.

The price per unit for Thailand Polishing equals $_______ nothing. (Enter your response rounded to the nearest penny.)

Which company should you choose? If the final destination is New Delhi, India, and there is a 30% import tax, which firm should you choose?

Explanation / Answer

To be calculated:

(a) Price per unit for Thailand Polishing

(b) Company to choose

Given values:

Number of polished disks = 200

Thailand Polishing bid = 2,200 baht

India Shine bid = 2,200 rupee

Sacramento Glow bid = $220

$1 = 10 baht

$1 = 8 rupee

Solution:

Part-A: To compare the bids submitted by the three suppliers, let us convert each of the bid into same units i.e. rupee.

1) Thailand Polishing bid = 2,200 baht

1 baht = $ 1/10 and $1 = 8 rupee

Thailand Polishing bid = (2200/10) = $220

The price per unit for Thailand Polishing equals $220.

Thailand Polishing bid = (220 x 8) = 1,760 rupee per unit

2) India Shine bid = 2,200 rupee per unit

3) Sacramento Glow bid = $220

$1 = 8 rupee

Sacramento Glow bid = (220 x 8) = 1,760 rupee per unit

Since the bids of the suppliers - Thailand polishing and Sacramento glow is equal and lowest, i.e., 1,760 rupee per unit, either of the company can be chosen.

Part-B: If the final destination is New Delhi, India - Import tax = 30%

The new bids of the three suppliers with additional import tax is computed as;

1) Thailand Polishing bid = 1760 + (1760 x 0.30) = 2,288 rupee per unit

2) India Shine bid = 2,200 rupee per unit (no import tax, assuming India Shine to be an Indian company)

3) Sacramento Glow bid = 1760 + (1760 x 0.30) = 2,288 rupee per unit

With additional import tax, the bid of India Shine is the lowest, therefore, India Shine should be selected.

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