G H K Minimum 50% Capacity US Shipment Germany 1,300 1,400 Shipment Japan 2,000 2,100 Shipment Brazil Shipment India Shipment Demand(ton/yr) N. America S. America 600 100 160 1,200 10 2,200 2,300 270 1,200 800 190 190 0 Europe Japan Asia Capacity (ton/yr) Minimum Run Rate 1,300 2,000 1,700 600 200 1,400 1,400 1,300 200 1,400 1,300 95 300 25 2,100 2,100 1,000 120 0 20 900 800 80 100 185 100 475 475 80 50 25 200 200 80 93 238 25 100 40 Rs Mark Yen Real Production Cost per Ton 1,800 000 10,000 15,000 13,000 400,000 Exch Rate 0.562 0.023 1.000 0.502 0.009 Prod Cost per Ton(US$) Production Cost In US$ Tpt Cost in US$ 16,740 418,500 7,306 9,200 736,000 10,000 1,000,000 7,530 1,461,200 3,576,750 487,000 164,000 64.000 7,500 60,000 7.974.950 800,000 426,000 1.625.200 4,063,750 1,060,000 Total AB D G K P C no 50% Capacity constraint 1 2 Shipment India 2,200 2,300 US Shipment Germany Shipment Japan Shipment Brazil 1,200 Shipment Demand(ton/yr) 270 N. America S. America Europe 600 270 1.300 2,000 0 1,200 1.400 800 190 190 2 100 1,300 1,400 2.100 1,300 1,000 200 600 200 1,400 120 7 2,000 Japan 1,400 120 300 2,100 800 100 1.700 1,300 Asia 100 006 50 80 Capacity (ton/yr) 460 200 185 475 420 C Minimum Run Rate 100 40 25 93 238 10 Rs. Real Yen Mark 11 400.000 13,000 Production Cost per Ton 15,000 1,800,000 10,000 12 0 562 0.023 9,200 0.009 0.502 1.000 13 Exch Rate 7,306 Prod Cost per Ton(US$) Production Cost In US$ 16,740 7,530 3,162,600 418.000 10,000 14 3.360.760 15 476,000 16 Tpt Cost in US$ 17 7.417.360 3.836.760 3,580,600 18 Total 19 20 21 C M N K H G A B 10 tons more capacity in Brazil Shipment Demand(ton/yr) 0 Shipment India 2,200 2.300 Shipment Brazil 1,200 Shipment Japan 135 Shipment Germany 115 US 270 (0) 20 2,000 1,300 600 N. America 190 190 800 2,100 1,400 1,200 S. America 200 1.300 1,400 1,400 600 200 1,300 Europe 1 000 120 2,100 300 120 2,000 1,400 Japan 100 80 800 2,100 900 20 1,300 1,700 Asia 80 80 210 210 50 175 115 475 185 Capacity (tonlyr) 40 105 25 238 93 Minimum Run Rate Rs Real Yen Mark 400 000 13,000 180,000 15,000 Production Cost per Ton 10,000 0.023 0.562 0,009 0.502 1.000 Exch Rate 9.200 7,306 1,674 Prod Cost per Ton(US$) Production Cost In US$ Tpt Cost in US$ 7,530 10,000 1,150,000 736,000 1,534,260 3.576,750 176,000 64.000 489.500 69,000 7.795,510 800.000 1.710.260 4,066,250 1,219,000 Total alings Review View Help Sunchem, a manufacturer of printing inks, has five manufacturing plants worldwide. Their locations and capacities are shown in Table 5-7 along with the cost of producing 1 ton of ink at each facility. The production costs are in the local currency of the country where the plant is located. The major markets for the inks are North America, South America, Europe, Japan, and the rest of Asia. Demand at each market is shown in Table. Transportation costs from each plant to each market in U.S. dollars are shown in Table 5-7. Management must come up with a production plan for the next year. South Amerka Production North Capacity Tons/Year Cost/Ton Asia America Europe Japan United States $600 $1,300 $2,000 $1,200 $1,700 185 $10,000 $1,300 $600 $1,400 $1,400 $1,300 475 15,000 euro Germany $2,000 $1,400 $2,100 $900 50 1,800,000 yen Japan $300 Brazil $1,200 $1,400 $2,100 $2,100 200 13,000 real $800 400,000 rupees India $2,200 $1,300 $1,000 $800 80 $2,300 Demand 270 200 120 190 100 (tons/year) a. If exchange rates are of capacity, how much should each plant produce, and which markets should each plant supply? expected as in Table 5-8, and no plant can run below 50 percent Real USS Euro Yen Rupee USS 1,000 1.993 107.7 1.78 43.55 Euro 0.502 54.07 0.89 21.83 Yon 0.0093 0.0185 1 0.016 0.405 Real 0.562 1.124 60.65 24.52 0.023 Rupee 0.046 2.47 0.041 b. If there are no limits on the amount produced in a plant, how much should each plant produce? c. Can adding 10 tons of capacity in any plant reduce costs? d. How should Sunchem account for the fact that exchange rates fluctuate over time? G H K Minimum 50% Capacity US Shipment Germany 1,300 1,400 Shipment Japan 2,000 2,100 Shipment Brazil Shipment India Shipment Demand(ton/yr) N. America S. America 600 100 160 1,200 10 2,200 2,300 270 1,200 800 190 190 0 Europe Japan Asia Capacity (ton/yr) Minimum Run Rate 1,300 2,000 1,700 600 200 1,400 1,400 1,300 200 1,400 1,300 95 300 25 2,100 2,100 1,000 120 0 20 900 800 80 100 185 100 475 475 80 50 25 200 200 80 93 238 25 100 40 Rs Mark Yen Real Production Cost per Ton 1,800 000 10,000 15,000 13,000 400,000 Exch Rate 0.562 0.023 1.000 0.502 0.009 Prod Cost per Ton(US$) Production Cost In US$ Tpt Cost in US$ 16,740 418,500 7,306 9,200 736,000 10,000 1,000,000 7,530 1,461,200 3,576,750 487,000 164,000 64.000 7,500 60,000 7.974.950 800,000 426,000 1.625.200 4,063,750 1,060,000 Total AB D G K P C no 50% Capacity constraint 1 2 Shipment India 2,200 2,300 US Shipment Germany Shipment Japan Shipment Brazil 1,200 Shipment Demand(ton/yr) 270 N. America S. America Europe 600 270 1.300 2,000 0 1,200 1.400 800 190 190 2 100 1,300 1,400 2.100 1,300 1,000 200 600 200 1,400 120 7 2,000 Japan 1,400 120 300 2,100 800 100 1.700 1,300 Asia 100 006 50 80 Capacity (ton/yr) 460 200 185 475 420 C Minimum Run Rate 100 40 25 93 238 10 Rs. Real Yen Mark 11 400.000 13,000 Production Cost per Ton 15,000 1,800,000 10,000 12 0 562 0.023 9,200 0.009 0.502 1.000 13 Exch Rate 7,306 Prod Cost per Ton(US$) Production Cost In US$ 16,740 7,530 3,162,600 418.000 10,000 14 3.360.760 15 476,000 16 Tpt Cost in US$ 17 7.417.360 3.836.760 3,580,600 18 Total 19 20 21 C M N K H G A B 10 tons more capacity in Brazil Shipment Demand(ton/yr) 0 Shipment India 2,200 2.300 Shipment Brazil 1,200 Shipment Japan 135 Shipment Germany 115 US 270 (0) 20 2,000 1,300 600 N. America 190 190 800 2,100 1,400 1,200 S. America 200 1.300 1,400 1,400 600 200 1,300 Europe 1 000 120 2,100 300 120 2,000 1,400 Japan 100 80 800 2,100 900 20 1,300 1,700 Asia 80 80 210 210 50 175 115 475 185 Capacity (tonlyr) 40 105 25 238 93 Minimum Run Rate Rs Real Yen Mark 400 000 13,000 180,000 15,000 Production Cost per Ton 10,000 0.023 0.562 0,009 0.502 1.000 Exch Rate 9.200 7,306 1,674 Prod Cost per Ton(US$) Production Cost In US$ Tpt Cost in US$ 7,530 10,000 1,150,000 736,000 1,534,260 3.576,750 176,000 64.000 489.500 69,000 7.795,510 800.000 1.710.260 4,066,250 1,219,000 Total alings Review View Help Sunchem, a manufacturer of printing inks, has five manufacturing plants worldwide. Their locations and capacities are shown in Table 5-7 along with the cost of producing 1 ton of ink at each facility. The production costs are in the local currency of the country where the plant is located. The major markets for the inks are North America, South America, Europe, Japan, and the rest of Asia. Demand at each market is shown in Table. Transportation costs from each plant to each market in U.S. dollars are shown in Table 5-7. Management must come up with a production plan for the next year. South Amerka Production North Capacity Tons/Year Cost/Ton Asia America Europe Japan United States $600 $1,300 $2,000 $1,200 $1,700 185 $10,000 $1,300 $600 $1,400 $1,400 $1,300 475 15,000 euro Germany $2,000 $1,400 $2,100 $900 50 1,800,000 yen Japan $300 Brazil $1,200 $1,400 $2,100 $2,100 200 13,000 real $800 400,000 rupees India $2,200 $1,300 $1,000 $800 80 $2,300 Demand 270 200 120 190 100 (tons/year) a. If exchange rates are of capacity, how much should each plant produce, and which markets should each plant supply? expected as in Table 5-8, and no plant can run below 50 percent Real USS Euro Yen Rupee USS 1,000 1.993 107.7 1.78 43.55 Euro 0.502 54.07 0.89 21.83 Yon 0.0093 0.0185 1 0.016 0.405 Real 0.562 1.124 60.65 24.52 0.023 Rupee 0.046 2.47 0.041 b. If there are no limits on the amount produced in a plant, how much should each plant produce? c. Can adding 10 tons of capacity in any plant reduce costs? d. How should Sunchem account for the fact that exchange rates fluctuate over time