Line Systems (PLS) of Nagoya, Japan, Redwings estimated demand for the harnesses is 5,000 units a month SBC's quote includes the following unit price, packing cost and freight cost: Unitrice = $25.00 Packing cost = $0.5 Pright cost - 90.73 permit PLS quotes a lower unit price of $21.50. But each month PLS would also need to pack the harnesses in three containers, ship them over and to a Japanese port transfer them to a container ship headed for Seattle, and then transport them everland again to Detroit. The costs associated with this movement-costs Redwing will have to pick up are not reflected in PLS sunt price. The additional logisti c s Reding would have to Conclude Packing cost-1.00 per unit Inland transportation cost to the port of export - 5200 per container with three containers needed per month) Freight forwarder's fee - $100 per shipment letter of credit documentation for international shipments, etc) Ocean transportation cost $2.067 per container . Marine Insurance $0.50 per 100 of shipment .US. port handling charges 5640 per container Customs duty - 5% of unit price Customs broker's fee - $150 per year Transportation from Seattle to Detroit - $1.56 per unit . Additional paperwork $100 year customs brokers must be lowed by the Customs Service. To further complicate things PLS has told Redwing that shipping lead times can be anywhere from six to eight weeks To compensate for this uncertainty, Redwing det se n al warehousing space to hold a ty stock of 1000 meses atacs of $3.00 pehme per month Redwing's personnel would also need to spend more time handling International shipments. Finally, each monthly PLS shipment is estimated to require four hours of additional administrative time, at a cost of $25 per hour Table 4 Landed Con t eng Automat SAC QUOTE PER UNIT PER MONTH PER YEAR Packing Freight Landed cost: PLS QUOTE PER MONTH PER YEAR Acquisition Packing Analyzing Landed Costs at Redwing Automotive Redwing Automotive has requested price quotations from two wiring hamess manufacturers, Subassembly Builders Company (SBC) in Atlanta, Georgia, and Product Line Systems (PLS) of Nagoya, Japan. Redwings estimated demand for the harness is 5,000 units a month SBC's quote includes the following unit price, packing cost, and freight cost: Unit price = $25.00 Packing cost = $0.75 per it Freight cost - $0.73 per unit PLS quotes a lower unit price of 521.30. But each month PLS would also need to pack the harnesses in three containers, ship them overland to a Japanese port, transfer them to a container ship headed for Seattle, and then transport them overland again to Detroit. The costs associated with this movement-costs Redwing will have to pick up-are not reflected in PLS's unit price. The additional logistics-related costs Redwing would have to cover include: Packing cost-$1.00 per unit Inland transportation cost to the port of export - $200 per container (with three containers needed per month) Freight forwarder's fee - $100 per shipment letter of credit, documentation for international shipments, etc.) Ocean transportation cost - 52,067 per container Marine insurance $0.50 per $100 of shipment U.S. port handling charges - 5640 per container Customs duty 5% of unit price Customs broker's fee - $150 per year Transportation from Seattle to Detroit - $1.86 per unit . Additional paperwork - $100 per year To further complicate things TES has told Redwing that shipping lead times can be anywhere from six to eight weeks To compensate for this uncertainty, Redwing would need to lease additional warehousing space to hold a safety stock of 1,000 hamesses, at a cost of $3.00 per harness per month Redwing's personnel would also need to spend more time handling international shipments. Finally, each monthly PLS shipment is estimated to require four hours of additional administrative time at a cost of $25 per hour. Table 8.4 eco n omie SAC QUOTE PER UNIT PER MONTH PER YEAR Acquisition Packing Freight Landed cost SBC QUOTE PER UNIT PER MONTH PER YEAR Acquisition Packing Freight Landed cost: PLS QUOTE PER UNIT PER MONTH PER YEAR Acquisition Packing Inland transportation Freight forwarder's fee Ocean transportation Marine insurance U.S. port handling Customs duty Customs broker's fee U.S. transportation Warehousing Administrative time Paperwork Landed cost: Line Systems (PLS) of Nagoya, Japan, Redwings estimated demand for the harnesses is 5,000 units a month SBC's quote includes the following unit price, packing cost and freight cost: Unitrice = $25.00 Packing cost = $0.5 Pright cost - 90.73 permit PLS quotes a lower unit price of $21.50. But each month PLS would also need to pack the harnesses in three containers, ship them over and to a Japanese port transfer them to a container ship headed for Seattle, and then transport them everland again to Detroit. The costs associated with this movement-costs Redwing will have to pick up are not reflected in PLS sunt price. The additional logisti c s Reding would have to Conclude Packing cost-1.00 per unit Inland transportation cost to the port of export - 5200 per container with three containers needed per month) Freight forwarder's fee - $100 per shipment letter of credit documentation for international shipments, etc) Ocean transportation cost $2.067 per container . Marine Insurance $0.50 per 100 of shipment .US. port handling charges 5640 per container Customs duty - 5% of unit price Customs broker's fee - $150 per year Transportation from Seattle to Detroit - $1.56 per unit . Additional paperwork $100 year customs brokers must be lowed by the Customs Service. To further complicate things PLS has told Redwing that shipping lead times can be anywhere from six to eight weeks To compensate for this uncertainty, Redwing det se n al warehousing space to hold a ty stock of 1000 meses atacs of $3.00 pehme per month Redwing's personnel would also need to spend more time handling International shipments. Finally, each monthly PLS shipment is estimated to require four hours of additional administrative time, at a cost of $25 per hour Table 4 Landed Con t eng Automat SAC QUOTE PER UNIT PER MONTH PER YEAR Packing Freight Landed cost: PLS QUOTE PER MONTH PER YEAR Acquisition Packing Analyzing Landed Costs at Redwing Automotive Redwing Automotive has requested price quotations from two wiring hamess manufacturers, Subassembly Builders Company (SBC) in Atlanta, Georgia, and Product Line Systems (PLS) of Nagoya, Japan. Redwings estimated demand for the harness is 5,000 units a month SBC's quote includes the following unit price, packing cost, and freight cost: Unit price = $25.00 Packing cost = $0.75 per it Freight cost - $0.73 per unit PLS quotes a lower unit price of 521.30. But each month PLS would also need to pack the harnesses in three containers, ship them overland to a Japanese port, transfer them to a container ship headed for Seattle, and then transport them overland again to Detroit. The costs associated with this movement-costs Redwing will have to pick up-are not reflected in PLS's unit price. The additional logistics-related costs Redwing would have to cover include: Packing cost-$1.00 per unit Inland transportation cost to the port of export - $200 per container (with three containers needed per month) Freight forwarder's fee - $100 per shipment letter of credit, documentation for international shipments, etc.) Ocean transportation cost - 52,067 per container Marine insurance $0.50 per $100 of shipment U.S. port handling charges - 5640 per container Customs duty 5% of unit price Customs broker's fee - $150 per year Transportation from Seattle to Detroit - $1.86 per unit . Additional paperwork - $100 per year To further complicate things TES has told Redwing that shipping lead times can be anywhere from six to eight weeks To compensate for this uncertainty, Redwing would need to lease additional warehousing space to hold a safety stock of 1,000 hamesses, at a cost of $3.00 per harness per month Redwing's personnel would also need to spend more time handling international shipments. Finally, each monthly PLS shipment is estimated to require four hours of additional administrative time at a cost of $25 per hour. Table 8.4 eco n omie SAC QUOTE PER UNIT PER MONTH PER YEAR Acquisition Packing Freight Landed cost SBC QUOTE PER UNIT PER MONTH PER YEAR Acquisition Packing Freight Landed cost: PLS QUOTE PER UNIT PER MONTH PER YEAR Acquisition Packing Inland transportation Freight forwarder's fee Ocean transportation Marine insurance U.S. port handling Customs duty Customs broker's fee U.S. transportation Warehousing Administrative time Paperwork Landed cost