Ching's Gubbins Mfg. Ltd. Ching's Gubbins Mfg. Ltd. has expanded rapidly to near capacity levels. Irving Ching, the owner, thinks the time has come to search for an international manufacturing location. Three location head the list, Option 1 - Phasebukistan, Option 2 the Tvitropolis Principality, and Option 3 - People's Republic of Knull. Some hard costs were simple to arrive at but an estimate had to be made for labour. First year requirements would be 30,000 units. Known costs are: Potential Locations Option 1 Option 2 Option 3 Fixed Cost CDN$ per year 180,000 160,000 150,000 Variable Cost per unit - CDNS Materials Overhead 0.30 0.30 0.35 0.65 1.10 0.85 It was estimated the labour skills available in each location would permit the following production out puts: Locations Option 1 Option 2 Option 3 Units per hour 12.5 15 20 Cost per hour - CDN 5.00 12.00 20.00 Although the international locations are separated geographically, Irving Ching, the owner and CEO, has determined the container load transportation costs and travel are essentially equal; hence, can be ignored in any calculations. Ching has visited each location and is satisfied with what he saw. In spite of that, Ching has concerns if he has considered all the relevant factors in location selection. He has heard rumours about each location but is unsure which are the important factors and questionable factors that might improve in time. He has presented this problem to you saying that all three locations are viewed as developing small nations with P.R. Knull the most developed and Phasebukistan the least. The development gaps are not great but measurable. Ching does hope to expand into other international markets when the time is right. Deliverables: 1. Produce a graph with total cost lines for each location. Marks = 2 2. Calculate the crossover points for options 1 vs 2, 2 vs 3, and 1 vs 3. Marks = 5 3. What is the best location for costs overall? Marks = 1 4. What should be Irving Ching's main three concerns that might apply for the locations? Marks = 2 Ching's Gubbins Mfg. Ltd. Ching's Gubbins Mfg. Ltd. has expanded rapidly to near capacity levels. Irving Ching, the owner, thinks the time has come to search for an international manufacturing location. Three location head the list, Option 1 - Phasebukistan, Option 2 the Tvitropolis Principality, and Option 3 - People's Republic of Knull. Some hard costs were simple to arrive at but an estimate had to be made for labour. First year requirements would be 30,000 units. Known costs are: Potential Locations Option 1 Option 2 Option 3 Fixed Cost CDN$ per year 180,000 160,000 150,000 Variable Cost per unit - CDNS Materials Overhead 0.30 0.30 0.35 0.65 1.10 0.85 It was estimated the labour skills available in each location would permit the following production out puts: Locations Option 1 Option 2 Option 3 Units per hour 12.5 15 20 Cost per hour - CDN 5.00 12.00 20.00 Although the international locations are separated geographically, Irving Ching, the owner and CEO, has determined the container load transportation costs and travel are essentially equal; hence, can be ignored in any calculations. Ching has visited each location and is satisfied with what he saw. In spite of that, Ching has concerns if he has considered all the relevant factors in location selection. He has heard rumours about each location but is unsure which are the important factors and questionable factors that might improve in time. He has presented this problem to you saying that all three locations are viewed as developing small nations with P.R. Knull the most developed and Phasebukistan the least. The development gaps are not great but measurable. Ching does hope to expand into other international markets when the time is right. Deliverables: 1. Produce a graph with total cost lines for each location. Marks = 2 2. Calculate the crossover points for options 1 vs 2, 2 vs 3, and 1 vs 3. Marks = 5 3. What is the best location for costs overall? Marks = 1 4. What should be Irving Ching's main three concerns that might apply for the locations? Marks = 2