User " Uva Worldwide, located in Chile, offers grapes at a purchase price of $0.62 per pound. 16,000 pounds per container. First, the grapes need to be shipped to the USA via waterway. The ocean freight costs are $3,000 per container and the import duties from Chile are 4% of the value of shipped grapes. Once arriving at the port of Long Beach, California, drayage costs are $250 per container. You momentarily store the grapes at a local warehouse at a rate of $6.25 per pallet. The container is picked up the next day and travels intermodal (through a motor carrier) to your facility at a cost of $175 per container. Upon arrival at your facility, you've calculated costs of $4.00 per pallet for receiving and quality. Based on historical averages, 3% of your container of grapes will spoil and 2% will be wasted in transport. The administrative costs to successfully manage a relationship between your organization and Uva Worldwide are estimated at 10% of the value of a container of shipped grapes. These costs account for the intricacies of dealing with an offshored supplier on a different continent, with a different language and culture than what is found at