Question

Tou are a purchasing and stot Healthy Snacks, Inc. which is a company that focuses on producing fasty healthy snacks. The company wants to replace the supplier of its current premium trail mixs and you have been assigned to find a new supplier. After an extensive marketing analysis, the marketing team has ahen you the list of ingredients that will make up the new trail mix product. almonds, Cashens, pecans sunflower seeds Peanut butter chips, Cranberries, and chocolate m&m's. en mallinas, The trail mit Pouches will be ounces each, and there will be an lequal amount of each ingredient including Shipping) is given in the Excel document. You must conduct a procurement analysis of this data and select a supplier, 1) On the excel document, in Column E Calculate the.cost per ounce for each ingredient.

Answer 1

CALCULATION OF COST PER OUNCE
Supplier	Ingredient	Cost ($)	Ounces	Cost per Ounce
A	Almonds	8.40	20	0.42
A	Cashews	7.99	20	0.40
A	Pecans	9.00	20	0.45
A	Sunflower seeds	3.33	20	0.17
A	Dried Cranberries	2.84	20	0.14
A	Peanut butter chips	1.09	20	0.05
A	Chocolate chips	1.20	20	0.06
	TOTAL			1.69
B	Almonds	5.65	10	0.57
B	Cashews	4.45	10	0.45
B	Pecans	6.22	10	0.62
B	Sunflower seeds	2.00	10	0.20
B	Dried Cranberries	1.85	10	0.19
B	Peanut butter chips	0.95	10	0.10
B	Chocolate chips	0.40	10	0.04
	TOTAL			2.15
C	Almonds	4.15	12	0.35
C	Cashews	3.50	12	0.29
C	Pecans	5.10	12	0.43
C	Sunflower seeds	1.44	12	0.12
C	Dried Cranberries	0.98	12	0.08
C	Peanut butter chips	0.20	12	0.02
C	Chocolate chips	0.18	12	0.02
	TOTAL			1.30
D	Almonds	4.89	10	0.49
D	Cashews	4.77	10	0.48
D	Pecans	5.00	10	0.50
D	Sunflower seeds	2.70	10	0.27
D	Dried Cranberries	1.50	10	0.15
D	Peanut butter chips	0.80	10	0.08
D	Chocolate chips	0.75	10	0.08
	TOTAL			2.04

6.) Since the cost per ounce is lowest in supplier C, Supplier C is the winning supplier. Supplier C's ingredients are always costing lower than the average. The most expensive ingredient is Pecans

7) CALCULATION OF SAVINGS PER YEAR

Old cost per pouch	$2.10
New Cost per pouch (supplier C)	$1.30
Savings per pouch	$0.80
Demand (units)	2,500
Total Savings ( $0.80 x 2,500)	$2,000.00

8) Since supplier C is supplying lower quality products, we will have to choose the second best option available, ie., Supplier A.

Supplier A's (new winning supplier) cost per ounce of almond (In $)	0.42
Difference between cost per ounce of almond between suppliers A & C (.42-.35)	0.07

9) By keeping supplier C's cost apart, the costs of new winning supplier, Supplier A, are lower than average except in case of chocolate chips