Component Cost	Seattle	Malaysia	Notes:
Hourly Wage	$13.25	$2.25	Includes fringes
Labor Content	49 minutes	63 minutes
Materials	$13	$13
Other Mfg Expenses	$1.50	$/0.75	Incl. Insurance, maintenance, warranty, theft losses
Shipment to Seattle	$0	$1	Ocean Container shipment. Airfreight is $14 per bag
Shipment from Seattle to customers	$3	$3

1. Suppose Timberland does move production of wholesale bags to Malaysia. Let's say it can place orders with its Malaysian supplier every four weeks; that is, one period equals four weeks. Its lead time is two periods; that is, L = The average demand for one type of wholesale bag is 200 bags per period (i.e., they sell, on average, 200 bags every four weeks), with a standard deviation of 100 bags. The holding cost for each bag each period is $1.00, and it would operate with a 2.5 safety factor. How much inventory on average, would it have on order and on hand? What would be the inventory holding cost per bag?

Revenue per bag whole sale is $35.