Question
Using the following safe url. a tutor came up with these total cost of ownership amounts. Can someone please explain how the tutor arrived at
Using the following safe url. a tutor came up with these total cost of ownership amounts. Can someone please explain how the tutor arrived at these numbers using Table 9-3 in the safe URL?
Original question: Use the total cost of ownership model to evaluate Zara's decision to outsource its clothing production to low-cost Asian countries, especially China. Make sure to consider associated costs such as hourly labor, transportation, tariffs, etc. for China, India, Portugal (closer to home), and Spain (local). HINT Hourly costs are given in Table 9-3 in the safe URL below, but not all costs are included. For others, perform an internet search to get the exact cost numbers or use relative measures.
Safe URL:
file:///C:/Users/user/Downloads/Zara%20Case%20(1).pdf
Tutor's answer:
The Total Cost of Ownership (TCO) model is a useful tool to evaluate Zara's decision to outsource its clothing production to low-cost Asian countries, especially China. The TCO model takes into account all associated costs such as hourly labor, transportation, tariffs etc. for China, India, Portugal (closer to home) and Spain (local).
For hourly labor costs, the table in the safe URL shows that hourly labor costs in China are the lowest at 0.40, followed by India at 0.80, Portugal at 2.00 and Spain at 2.20. How did they arrive at these amounts. The table 9-3 doesn't show these amounts.
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