Recently, Abercrombie & Fitch $($A&F$)$ began shifting a large portion of its Asian

deliveries to the U$.$S$.$ from air freight to slower but cheaper ocean freight. Shipping

costs have been cut dramatically, but shipment times have gone from days to weeks.

In addition to having less control over inventory and being less responsive to

fashion changes, the holding costs have risen for the goods in transport. Meanwhile,

Central America might offer an inexpensive manufacturing alternative that could

reduce shipping time through the Panama Canal to$,$ say, $6$ days, compared to$,$ say,

$28$ days from Asia. Suppose that A&F uses an annual holding rate $31\%.$ Suppose

further that the product costs $$21$ to produce in Asia. Assume that the transportation

cost via ocean linear would be approximately the same whether coming from Asia or

Central America.

a$)$ What is the product cost plus holding cost per unit from Asia?

The product cost plus holding cost per unit from Asia is $$,($round your response to

three decimal places$).$

b$)$ If the product cost in Central America is $x,$ what is the holding cost per unit when

shipping from Central America $($as a function of $x)?$

The holding cost per unit when shipping from Central America is $$,x($round your

response to three decimal places$).$

c$)$ Given a$)$ and b$),$ what is the break$-$even point for $x?$ In other words, what would the

maximum production cost in Central America need to be in order for that to be a

competitive source compared to the Asian producer?

The maximum production cost in Central America should be $$,($round your

response to two decimal places$).$