1. Costs for Soventia manufacturing in the US have increased by 50% during the 12 month planning phase. The labor force includes10,000 people across 5 factories (California; Colorado, New York; Texas, and Florida). Soventia utilizesboth general and custom-made parts to manufacture its smartphones. General parts have increased in priceby 20% and custom parts have increased 1000% in the last quarter alone. Another costly input isthe sophisticated computer electronics which accounts for 40% per machine. The cost distribution is as follows:Total Cost Per Unit: $1,000Labor: $500 Electronics:$400 Parts / Other Inputs: $100

Discuss your strategy options for combating the rising cost of their US manufacturing.

2. On Tuesday morning, major news broke detailing a diplomatic breakdown between the US and China.As a result, the Chinese government has stopped any firms from trade with US companies. So, critical custom electronics are not available to Soventia from its primary supplier. To compoundproblems, a terrorist organization launched an attack in a Middle Eastern country where the back-upsupplier is located. The back-up supplier's factory was badly damaged by a bomb and will be out ofcommission for at least 12 months. The "good news" is that they will sell you three-months of parts at 1500% the normal price. The final challenge is that the US government in January 2024 will requiretracking and auditing on manufacturing inputs purchased abroad, which means that Soventiawill haveto devote extra company resources to maintaining compliance.Discuss options for addressing this situation in the short-term and long-term. Put together detailed strategic recommendations for growing the business, controlling future costs and managing risksover the next 5 years.