Question
S11.39. (LO S11.2) Horizon Computers manufactures laptops in Germany, Belgium, and Italy. Because of high tariffs between international trade groups, it is sometimes cheaper to
S11.39. (LO S11.2) Horizon Computers manufactures laptops in Germany, Belgium, and Italy. Because of high tariffs between international trade groups, it is sometimes cheaper to ship part-ly completed laptops to factories in Puerto Rico, Mexico, and Panama and have them completed before final shipment to Canadian distributors in British Columbia, Ontario, and Quebec. The c (8/unit) of the completed laptops plus tariffs and shipment costs from the European plants directly to Canada and supply and demand are shown as follows. Canadian Distributors European Plants 7. British Columbia 8. Ontario 9. Quebec Supply (1000s) 1. Germany $2600 $1900 $2300 5.2 2. Belgium 2600 6.3 3. Italy 1800 2500 4-5 Demand (1000s) 3-7 7.8 2200 2100 2200 2.1 Alternatively, the unit costs of shipping partially completed laptops to plants for finishing before sending them to Canada are as follows. Factories European Plants 4. Puerto Rico 5. Mexico 6. Panama 1. Germany $1400 $1200 $1100 2. Belgium 1600 1100 900 3. Italy 1500 1400 1200 Canadian Distributors Factories 7. British Columbia 8. Ontario 9. Quebec 4. Puerto Rico $800 $700 $900 5. Mexico 600 800 6. Panama 900 1200 1100 700 Determine the optimal shipments of laptops that will meet demand at the Canadian distributors at the minimum total cost.
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