Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be

A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $5.5 per week in the United States and $2.50 per week in Taiwan. The lead time with U.S. production is one week, whereas it is six weeks with production in Taiwan. In addition, it costs $3 to ship laptops to the United States from Taiwan. Weekly demand is 1500 laptops, with a standard deviation of 900.

(a) What is the per unit holding cost of a laptop with U.S. production?

(b) What is the per unit holding cost of a laptop with production in Taiwan?

c) A laptop requires 40 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $30 per hour, while in Taiwan it is $10. What is the change in cost per laptop if it switches production to Taiwan?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Management A Managerial Approach

Authors: Jack R. Meredith, Samuel J. Mantel Jr.

8th edition

470533021, 978-0470533024

More Books

Students also viewed these General Management questions

Question

identify the classifications of interventions;

Answered: 1 week ago