The deans' suite hoped to cut costs and decided to perform a total cost analysis on its vodka supplier. Consumption was currently 6,000 bottles per semester and this was predicted to maintain that level for the next few years. Their current source, Byron's, charged $9.50 per bottle and packed 288 bottles in a crate. The cost to ship the crate was $15. Another potential source of vodkas was Pancho's, who charged $9.00 per bottle but could ship only 100 bottles in a crate and at a higher price, $20. Assume that a partial crate may be purchased. What is the total annual cost to supply vodka from their current supplier?

Question

Quizplus · Accepted Answer

The total annual cost from the current supplier, Byron's, can be calculated as follows: The cost per bottle is $9.50, and there are 6,000 bottles needed per semester. Since there are two semesters in a year, the total annual consumption is 12,000 bottles. The cost for the bottles alone is 12,000 bottles * $9.50 = $114,000. The shipping cost per crate is $15, and each crate contains 288 bottles. Therefore, the total number of crates needed annually is 12,000 bottles / 288 bottles per crate = 41.67 crates. Since a partial crate can be purchased, we consider the shipping cost for 42 crates, which is 42 crates * $15 = $630. The total annual cost is the sum of the cost for the bottles and the shipping, which is $114,000 + $630 = $114,630. However, none of the provided options match this calculation, suggesting a mistake in the calculation or misunderstanding of the question's requirements. Given the options, the closest to the expected calculation process is option D, but the correct calculation based on the provided details should have led to a different total. This indicates a need to reevaluate the calculation or the interpretation of the provided options.

The Deans' Suite Hoped to Cut Costs and Decided to Perform