CASE 11-2 Get Me Those T-Shirts With its conference championship win on November 15th, tiny Faber College in Cottage Grove, Oregon, has clinched its first ever berth in the collegiate lacrosse championship. Kent Dorfman, intern for the local bookstore, has been tasked with sourcing Faber College lacrosse t-shirts for the crazed fans before the big game on January 1st. His domes- tic search found only one supplier with t-shirts in the perfect shade of Faber blue. How ever, the delivered cost per t-shirt is $28, leaving no room for a markup by the bookstore. Robert Hoover, the manager suggests that Dorfman look into international sources for the shirts. Hoover reminds Dorfman that the shirts must be on the shelf before the team leaves town on December 26th. So, Dorfman goes to work and identifies three sources. Potential Suppliers Source Location Srgrein Shirts Reykjavik, Iceland Ropa Deportiva T-Shirts llimitado Nuevo Laredo, Havana, Cuba T-Shirt Materials T-Shirt Cost per dozen Delivery Cost per dozen Mexico Polyester/Elastine Polyester/Elastine Cotton 2,500 MXN 180 MXN 16,300 ISK 87 CUC 2200 ISK 9 CUC Dorfman takes his work to Hoover who wants the information converted into U.S. dollars for comparison. A quick Internet search for exchange rates produces the following: Exchange Rates Country Exchange Rate Mexico Iceland Cuba 14.76 MXN = 1 USD 123.51 ISK-1 USD 1 CUC" 1 USD Hoover also asked about the issue of import duties, so Dorfman did some additional investigation. His Internet search revealed that there may be duties involved for these t-shirts. In the US. Harmonized Tariff Schedule there's a general rate of duty charged to goods coming from countries with normal U.S. trade relationship, a special rate of duty that gives preference to countries with special trade agreements, and a punitive rate of duty for a few countries that do not have normal U.S. trade relationships