Case Scenario: Assuming that Piedmont is getting parts from Milligan to produce its custom trailers, Milligan offers parts to Piedmont.


Questions:

1. What are the products that Piedmont needs from Milligan?
Answer:

Milligan's Data	Unit Cost	Unit Selling Price
Rubber Tires	$150	$200
Steel Rims	$250	$300
Aluminum tube 10ft.	$80	$100
Aluminum tube 12ft.	$100	$120
Metal Sheet 12'X20'	$140	$180
Metal Sheet 8'X4'	$100	$140
Metal Sheet 10'X4'	$120	$160
Metal Beams	$160	$200

2. Would Piedmont save as much if they get certain parts from Milligan and used it in producing custom trailers?

Answer: It is much cheaper to avail parts from Milligan in producing a custom trailer as compared to this given supplier data (see the table below).

Supplier's Data	Unit Cost	Unit Selling Price
Rubber Tires	$200	$250
Steel Rims	$300	$350
Aluminum tube 10ft.	$100	$150
Aluminum tube 12ft.	$120	$150
Metal Sheet 12'X20'	$160	$200
Metal Sheet 8'X4'	$120	$180
Metal Sheet 10'X4'	$180	$200
Metal Beams	$200	$250

3. Wouldn't it be more convenient for Piemont to get the parts needed from the Milligan?

Answer: It is more convenient for Piedmont to get parts from Milligan because Milligan is offering a cheaper and much lower parts. Milligan also has this deal of offering 60 to 90 days to pay.

4. How much would it cost to produce one model of custom trailer? How much net could Piedmont gain?

Answer:

Model	Selling Price	Cost of Good Sold	Net
YvonneAB30	$1400	$1000	$400
MCModel5KB	$1600	$1200	$400
ABCModel	$1800	$1400	$400
XYZModel	$2000	$1500	$500
LMOModel	$2500	$2000	$500

5. Is the highest selling product of Piedmont provides lesser cost and a higher benefit where they are getting its product parts or raw materials from Milligan?

Yes. Since Milligan is offering a cheaper parts as compared to other suppliers Piedmont was able to gain higher net than of getting its part to other suppliers with a lesser net. Piedmont after using its custom order tracking they were able to monitor that for every model they made they see to it as optimal when it comes to minimizing cost and maximizing profit.

Information: To answer this question, Milligan is offering what Piedmont needs in order to produce the product. Milligan is using its inventory system to track whether they have the parts needed to serve Piedmont. While Piedmont is using its custom order tracking to monitor whether they are getting the optimal parts in producing their products, minimizing its cost and at the same time maximizing its benefit.