The text below describes a scenario in which your company is building an automotive electronics component for a vehicle manufactured in the United States. Your customer is a major automotive OEM. Your job is to compare costs from three potential manufacturing locations: China, Mexico, and the United States Data for each region are given below.

China Mexico 500,000 4 years Parameter USA Comment 250 production days/ year Annual Volume Term of Contract Number of passive components BOM Cost of Passive Components Placement cost per passive component Failure rate, passive components 100 $2.00 $0.005 0.15% $2.08 $0.0055 0.1% $2.10 $0.0055 0.1% Failure rate of a single component placement Number of ICs BOM Cost of ICs Total pin count, IC:s Placement Cost, per pin IC soldering failure rate per pin 12 $7.30 250 pins S0.022 0.05% $7.20 $7.30 $0.02 $0.022 Direct Labor per part Direct Labor Cost Indirect Labor per part Indirect Labor Cost Incoming Quality Supplier Development $100,000$75,000 6 minutes 4 minutes $10/hour $15/hour$30/hour 3 minutes 1.5 minutes 1.5 minutes $15/hour $20/hour$50/hour $0.10 1 minute $0.20 $0.05 Cost per part $40,000 Annual Cost $0.05/part Shipping Cost Shipping Method Shipping Time Alternative Shipping Cost Truck 1 day N/A Ocean/Ra Truck 8 weeks $0.50/part (Air) 1 week N/A China Mexico 500,000 4 years Parameter USA Comment 250 production days/ year Annual Volume Term of Contract Number of passive components BOM Cost of Passive Components Placement cost per passive component Failure rate, passive components 100 $2.00 $0.005 0.15% $2.08 $0.0055 0.1% $2.10 $0.0055 0.1% Failure rate of a single component placement Number of ICs BOM Cost of ICs Total pin count, IC:s Placement Cost, per pin IC soldering failure rate per pin 12 $7.30 250 pins S0.022 0.05% $7.20 $7.30 $0.02 $0.022 Direct Labor per part Direct Labor Cost Indirect Labor per part Indirect Labor Cost Incoming Quality Supplier Development $100,000$75,000 6 minutes 4 minutes $10/hour $15/hour$30/hour 3 minutes 1.5 minutes 1.5 minutes $15/hour $20/hour$50/hour $0.10 1 minute $0.20 $0.05 Cost per part $40,000 Annual Cost $0.05/part Shipping Cost Shipping Method Shipping Time Alternative Shipping Cost Truck 1 day N/A Ocean/Ra Truck 8 weeks $0.50/part (Air) 1 week N/A