Your Chilean plant serves the Chilean and Argentine markets. Currently production at your Chilean plant is 100 million units per year. Demand for next year will be 50 million units in Chile, and 50 million units in Argentina. Manufacturing costs in Chile will increase 12% due to damaged infrastructure. Production is expected to decrease 25% in the next year due to this disaster (that is, your capacity next year will drop 25%). As a result, you will still be able to meet all of the Chilean demand from the local plant. Argentina, however, will have to source products from both the Chilean and home plants.

Change in landed cost for Chile: $

Change in landed cost for Argentina: $

Total change in landed cost: $

Plant Location	Home	Chile
Average Unit COGS ($)	0.7129	0.5294
To:
Argentina
Shipping	0.0600	0.0200
COGS + Shipping	0.7729	0.5494
Tariff %	21.0000%	0.0000%
Tariff $	0.1623	0.0000
Total Unit Landed Cost (COGS + Shipping + Tariff)	0.9352	0.5494
To:
Chile
Shipping	0.0600	0.0100
COGS + Shipping	0.7729	0.5394
Tariff %	0.0000%	0.0000
Tariff $	0.0000	0.0000
Total Unit Landed Cost (COGS + Shipping + Tariff)	0.7729	0.5394