Refer to Problem 8.1. Shipping cost from Cambodia to Halifax, the final destination, is $1.50 per unit. Shipping cost from China to Halifax is $1 per unit, while the shipping cost from Winnipeg to Halifax is $0.25 per unit. Considering both labour and transportation costs, which is the most favourable production location?

In problem 8.1

In Cambodia, six labourers, each making the equivalent of $3 per day, can produce 40 units per day. In China, 10 labourers, each making the equivalent of $2 per day, can produce 45 units. In Winnipeg, two labourers, each making $60 per day, can make 100 units. Based on labour costs only, which location would be most economical to produce the item?