If the number

of containers is 520.15; use 521 containers.

b) Assume that goods imported from China are delivered directly to distribution centers.

c) If you need lead time, please use the information below.

China: Average Lead Time = 30 days SD of lead time = 6 days

Mexico: Average Lead Time = 3 days SD of lead time = 2 days

USA: Average Lead Time = 1 day SD of lead time = 1 day

1 year = 5 days * 52 weeks = 260 days ( 8 hours work/day)

d) If you need C.S.L. (Cycle service level), let C.S.L. = 93.53%

e) Discount rate = 9% ( given 7% in the textbook)

f) H= holding cost = $16 and Ordering cost = $ 551.73 / Order (China, and Mexico)

H= holding cost = $16 and Ordering cost = $ 50/ Order (USA)

g) Do not include in-transit inventory costs.

Revised: Table 15-9 Labor Cost Assumptions (p 461)

Monthly Wages

	China (CNY)	Mexico (MXN)
1999	649.5	2392
2000	729.2	2910.5
2001	814.5	3367.6
2002	916.8	3537.5
2003	1041.3	3737.7
2004	1169.4	3858.8
2005	1313.1	3983.8
2006	1497.2	4112.9
2007	1740.3	4246.2
2008	2016	4387.7
2009	2187.3	4514.6
2010	2289.7	4649.8

	Wage Forecast (Monthly)
	2011	2012	2013	2014	2015
China	2,530.00	2,705.62	2,863.49	2,999.34	3,108.71
Mexico	4,602.78	4,668.25	4,729.20	4,786.22	4,839.77

Revised: Table 15-12 Exchange Rate History (P 463)

	CNY/USD	MXN/USD
2000	8.279	9.46
2001	8.277	9.33
2002	8.277	9.67
2003	8.277	10.79
2004	8.277	11.29
2005	8.194	10.88
5006	7.973	10.91
2007	7.608	10.93
2008	6.949	11.15
2009	6.831	13.07
2010	6.770	12.62

	Exchange Rate Forecast
	2011	2012	2013	2014	2015
China	6.76	6.59	6.41	6.24	6.07
Mexico	12.94	13.33	13.72	14.13	14.55

 Please provide NPV for China, USA, and Mexico