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John is an entrepreneur whose product is made overseas and shipped to a warehouse in the United States. John receives a quote from two different
John is an entrepreneur whose product is made overseas and shipped to a warehouse in the United States. John receives a quote from two different factories: one in Shanghai, China and one in Mumbai, India. He then makes two calculations. First he calculates the landed cost to ship the product from Shanghai, China to Seattle, Washington. Second, he calculates the landed cost to ship the product from Mumbai, India to Savannah, Georgia. John wants to minimize his costs so he decides to make the product in the factory with the lowest landed cost. What is wrong with John's analysis? Landed costs need to be calculated to the same destination O John should choose the factory with the lowest quote, not the lowest landed cost. Landed costs need to be calculated from the same origin. Landed costs must be calculated into to Los Angeles. California
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