1. A) Incumbent inertia 2. B) Use of tacit resources 3. C) Free-rider effect 4. D) Presence of low exit barriers Why is it A?
Q: Semi-con Industries is a global semiconductor manufacturer with operations in the United States,…
A: Business ethics is a kind of applied ethics, which is used by professionals or researchers to solve…
Q: For an American entrepreneur to start and operate an airline in the EU the following conditions need…
A: In order to explore and establish business at off shore market financial prudence and strategic…
Q: G&D Ltd is a leading pharmaceutical company in Ghana. Upon conducting a SWOT analysis, G&D is…
A: SWOT analysis is the strategic planning & strategic managing approach. This technique is…
Q: International trade may offer lower unit prices but at a higher risk. Consider the total cost and…
A: In the above question, the average inventory is calculated in units, which are 707 units for Dong…
Q: Sectone A dentist in Mexico City, Mexice has decided to target adult orthodontia patients in the…
A: Health care is important for the world. There are various health categories. For example dental…
Q: When KFC opened locations in China, the company slogan was “finger-lickin’ good.” However, the…
A: The world is a place of a melting pot of different cultures, religions, and people. Moving from one…
Q: In the face of such an surplus, where private sector buyers and suppliers could not do anything more…
A: Businesses understand that the Law of Demand and Supply is insufficient to maintain economic…
Q: Explain the market summary of Air Asia company as a part of the situation analysis.
A: ANSWER: Air Asia its market on the basis of three distinct: Geographic segmentation- They serves…
Q: In which of the following groups of sustainability labels are all third party certified? Select one…
A: Third-party certification is an optional marking that companies apply to goods to indicate that they…
Q: The economic argument being expressed in this extract is that of __________ and has the consequence…
A: 1. Answer: Option (A)Market failure and externalities because cells become wholly reliant on MTN and…
Q: A MANAGER TAKES CHARGE Toys "R" Us EDI System Rescued Toys "R" Us is a leading retailer of toys and…
A: **Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Advise transnet group ceo, Portia derby and her team on the strategic management process the company…
A: In order to keep up with changing technological, market, and business situations, businesses will…
Q: Walmart expansion in China carries multiple risks, identify and discuss.
A: Walmart Inc. is an American multinational retail company that operated as a chain type of business…
Q: Suppose that there are three kinds of individuals: the uninfected, the infected and symptomatic, and…
A: In the current case first let us see some examples of non pharmaceutical interventions (NPI) - is a…
Q: Air Arabia reports net loss in first half 2020 Sharjah: Air Arabia, the first and largest low-cost…
A: Air Arabia is the first and the largest low-cost carrier in the Middle East and North Africa. They…
Q: What issues should Jerry and the executive committee address? Why? (Hint: Make assumptions where…
A: Disclaimer: Since you have posted a question with multiple sub-parts, we will solve first three…
Q: The restaurant charge 3 times higher than the normal price Based on the statement why it is…
A: Business ethics refers to the set of norms and fundamental principles that need to be followed when…
Q: Air Asia is a low-cost airline operating primarily in Asia. It was the first airline in Asia to…
A: Porter's Five Forces Model: Competition Rivalry: There exist a high number of competitors in the…
Q: Mylan's Epipen from 2007 to 2016 How did certain laws and regulations make it possible for Mylan to…
A: Business ethics are morals or principles that acts as a guideline for the way a business conducts…
Q: the Build! Build! Build! Program (BBB) (the centerpiece program of the Duterte administration that…
A: DuterteNomics or Dutertenomics is a trick all term alluding to the financial approaches of Rodrigo…
Q: The Great Eastern hotel, a privately owned, independent, five-star deluxe hotel located in Hong…
A: The financial crisis is the situation in the corporate in which some of the financial assets of the…
Q: Ahmed has recently joined the procurement team at Safari company, he is new to the concept of…
A: It is important for an organization to develop policies since any organization which do not have a…
Q: LUXURY PRODUCT MANUFACTURER TURNS TO PENSKE TO IMPROVE WAREHOUSE AND DISTRIBUTION OPERATIONS A…
A: Total Quality management - is described as a persistent effort by the administration as well as…
Q: 1. Evaluate Honda Motor Company’s operations in the Philippines and other countries. Select at least…
A: Disclaimer: Since you have posted a question with multiple sub-parts, so we will solve first three…
Q: Explain Oman government taxation policy and how government measure to address COVID-1
A: On this day, fifty years ago, during the Dhofar War, it was against the People's Front before the…
Q: Thabo, a data analyst for a major casino, is working after hours to finish an important project. He…
A: This is an ethical dilemma for Thabo during which he's facing two difficult choices either to report…
Q: LUXURY PRODUCT MANUFACTURER TURNS TO PENSKE TO IMPROVE WAREHOUSE AND DISTRIBUTION OPERATIONS A…
A: Total quality management (TQM) is a management technique used by organizations to achieve excellence…
Q: Assume you have joined a company as a sales manager for Laptop Sales & services. This company was…
A: Compensation is a monetary or nonmonetary reward that is given to the company employees in exchange…
Q: Analyse and explain ONE key risk that Sushiro faced when it operates overseas. With reference to the…
A: Geopolitical risk, also known as political risk, occurs when a country's government makes an…
Q: The sovereign debt crisis in the euro zone led to depreciation of the dollar against the euro and…
A: The sovereign debt crisis in the euro zone was the reason because the European countries were unable…
Q: The Great Eastern hotel, a privately owned, independent, five-star deluxe hotel located in Hong…
A: 1. The Great Eastern hotel is facing the issue of reduction in the room booking, whichwas so high in…
Q: Macrosoft Corporation is a software giant in personal computers (PCs). Although its flagship…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Which of the following is considered a main source of Australian law? Option- 1. Case law, which is…
A: There are two main sources of law in Australia, case law or common law,based on the choices of…
Q: What are the major advantages of air carriers? What are the major crisis does air industry faces…
A: it's far tough to anticipate a worldwide with out flying. That’s precisely what took place in March…
Q: One of the discussed intervention tools is called: "price ceiling". This is a maximum price that a…
A: Here, question has asked to describe the logical reasoning behind creating a price ceiling for bread…
Q: In the pandemic situation all the industrial units were closed for few months in April – May 2020,…
A: The manufacturing business is intensely hit by the effect of the coronavirus infection, as it shut…
Q: note: do not copy on the internet DIRECTION: Make a graphic organizer for the following topics: •…
A: A Global Corporation is a huge organization regularly shaped in home country and afterward extends…
Q: Country Y is entering a recession and is debating a stimulus package of tax cuts and increased…
A: Stimulus Package is a package of tax rebates and incentives used by the governments of various…
Q: The Great Eastern hotel, a privately owned, independent, five-star deluxe hotel located in Hong…
A: In the given case study the Great Eastern Hotel is a privately owned, independent and five-start…
Q: The role of value and price communications is to protect your value proposition from any of the…
A: Marketing is performed at the end level as it has to ensure promotion and distribution of goods and…
Q: what would be some of the objectives?
A: The following are some of the objectives of Neptune communications launching in Jamaica: The…
Q: While the A380 was widely regarded as a failure, Airbus maintained its market share throughout the…
A: Introduction:- The Airbus A380 is a broad range plane produced by Airbus. It is the busiest…
Q: In a cap and trade program, the ‘trade’ refers to what? a. trading prices of expensive fossil…
A: Before we proceed to answer the given multiple choice question, we will define the cap and trade…
Q: Read the following extract and answer question 1 and 2 Evidence of domination Both the Competition…
A: Market competition is described as a condition in which one party wins over another party. It is a…
Q: The Great Eastern hotel, a privately owned, independent, five-star deluxe hotel located in Hong…
A: The Great Eastern hotel is facing the issue of reduction in the room booking, whichwas so high in…
Q: create environment forces of Jollibee foods corporation in competitive rivalry with the following…
A: Porter's Five (5) Forces Model was proposed by Michael E. Porter in 1979. The intention was to…
Q: The investment required to bring South Africa’s rail network back to its design specification was…
A: The railroad is a largely used transportation method since it was introduced. It is a transportation…
Q: When income increases, expenditure on imports tend to increase. Which of the following best…
A: Positive relationship: A positive relationship endures when two variables progress correspondingly…
Fashion Fair Corp., the first mover in the “all-year discount” stores market, lost its market share to a late entrant, Brand Fair Inc. Brand Fair operates online discount stores, which is cost-efficient when compared to investing in a brick-and-mortar store. Fashion Fair has been unable to replicate the online store business model because of its existing contracts with suppliers and heavy investment in retail stores. This ultimately leads to the failure of the business. Which of the following can be attributed to Fashion Fair’s failure?
1. A) Incumbent inertia
2. B) Use of tacit resources
3. C) Free-rider effect
4. D) Presence of low exit barriers
Why is it A?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Avion, Inc. Susan Dey and Bill Mifflin, procurement managers at Avion, Inc., sat across from each other and reviewed a troubling performance report concerning a key supplier, Foster Technologies. The report detailed the deteriorating performance of Foster Technologies in the areas of material quality and on-time delivery. At this point, Kevin ODonnell, another procurement manager, entered the room. Explain the role of performance measurement in managing supply chain activities.Avion, Inc. Susan Dey and Bill Mifflin, procurement managers at Avion, Inc., sat across from each other and reviewed a troubling performance report concerning a key supplier, Foster Technologies. The report detailed the deteriorating performance of Foster Technologies in the areas of material quality and on-time delivery. At this point, Kevin ODonnell, another procurement manager, entered the room. What parts of the supply chain are most closely involved with the situation in this case? What is the responsibility of each part in order to maintain a smooth flow of material?The Global Sourcing Wire Harness Decision Sheila Austin, a buyer at Autolink, a Detroit-based producer of subassemblies for the automotive market, has sent out requests for quotations for a wiring harness to four prospective suppliers. Only two of the four suppliers indicated an interest in quoting the business: Original Wire (Auburn Hills, MI) and Happy Lucky Assemblies (HLA) of Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a month. Both suppliers will incur some costs to retool for this particular harness. The harnesses will be prepackaged in 24 12 6-inch cartons. Each packaged unit weighs approximately 10 pounds. Quote 1 The first quote received is from Original Wire. Auburn Hills is about 20 miles from Autolinks corporate headquarters, so the quote was delivered in person. When Sheila went down to the lobby, she was greeted by the sales agent and an engineering representative. After the quote was handed over, the sales agent noted that engineering would be happy to work closely with Autolink in developing the unit and would also be interested in future business that might involve finding ways to reduce costs. The sales agent also noted that they were hungry for business, as they were losing a lot of customers to companies from China. The quote included unit price, tooling, and packaging. The quoted unit price does not include shipping costs. Original Wire requires no special warehousing of inventory, and daily deliveries from its manufacturing site directly to Autolinks assembly operations are possible. Original Wire Quote: Unit price = 30 Packing costs = 0.75 per unit Tooling = 6,000 one-time fixed charge Freight cost = 5.20 per hundred pounds Quote 2 The second quote received is from Happy Lucky Assemblies of Guangdong Province, China. The supplier must pack the harnesses in a container and ship via inland transportation to the port of Shanghai in China, have the shipment transferred to a container ship, ship material to Seattle, and then have material transported inland to Detroit. The quoted unit price does not include international shipping costs, which the buyer will assume. HLA Quote: Unit price = 19.50 Shipping lead time = Eight weeks Tooling = 3,000 In addition to the suppliers quote, Sheila must consider additional costs and information before preparing a comparison of the Chinese suppliers quotation: Each monthly shipment requires three 40-foot containers. Packing costs for containerization = 2 per unit. Cost of inland transportation to port of export = 200 per container. Freight forwarders fee = 100 per shipment (letter of credit, documentation, etc.). Cost of ocean transport = 4,000 per container. This has risen significantly in recent years due to a shortage of ocean freight capacity. Marine insurance = 0.50 per 100 of shipment. U.S. port handling charges = 1,200 per container. This fee has also risen considerably this year, due to increased security. Ports have also been complaining that the charges may increase in the future. Customs duty = 5% of unit cost. Customs broker fees per shipment = 300. Transportation from Seattle to Detroit = 18.60 per hundred pounds. Need to warehouse at least four weeks of inventory in Detroit at a warehousing cost of 1.00 per cubic foot per month, to compensate for lead time uncertainty. Sheila must also figure the costs associated with committing corporate capital for holding inventory. She has spoken to some accountants, who typically use a corporate cost of capital rate of 15%. Cost of hedging currencybroker fees = 400 per shipment Additional administrative time due to international shipping = 4 hours per shipment 25 per hour (estimated) At least two five-day visits per year to travel to China to meet with supplier and provide updates on performance and shipping = 20,000 per year (estimated) The international sourcing costs must be absorbed by Sheila, as the supplier does not assume any of the additional estimated costs and invoice Sheila later, or build the costs into a revised unit price. Sheila feels that the U.S. supplier is probably less expensive, even though it quoted a higher price. Sheila also knows that this is a standard technology that is unlikely to change during the next three years, but which could be a contract that extends multiple years out. There is also a lot of hall talk amongst the engineers on her floor about next-generation automotive electronics, which will completely eliminate the need for wire harnesses, which will be replaced by electronic components that are smaller, lighter, and more reliable. She is unsure about how to calculate the total costs for each option, and she is even more unsure about how to factor these other variables into the decision. Based on this case, do you think international purchasing is more or less complex than domestic purchasing? Why? Is it worth the additional effort?
- The Global Sourcing Wire Harness Decision Sheila Austin, a buyer at Autolink, a Detroit-based producer of subassemblies for the automotive market, has sent out requests for quotations for a wiring harness to four prospective suppliers. Only two of the four suppliers indicated an interest in quoting the business: Original Wire (Auburn Hills, MI) and Happy Lucky Assemblies (HLA) of Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a month. Both suppliers will incur some costs to retool for this particular harness. The harnesses will be prepackaged in 24 12 6-inch cartons. Each packaged unit weighs approximately 10 pounds. Quote 1 The first quote received is from Original Wire. Auburn Hills is about 20 miles from Autolinks corporate headquarters, so the quote was delivered in person. When Sheila went down to the lobby, she was greeted by the sales agent and an engineering representative. After the quote was handed over, the sales agent noted that engineering would be happy to work closely with Autolink in developing the unit and would also be interested in future business that might involve finding ways to reduce costs. The sales agent also noted that they were hungry for business, as they were losing a lot of customers to companies from China. The quote included unit price, tooling, and packaging. The quoted unit price does not include shipping costs. Original Wire requires no special warehousing of inventory, and daily deliveries from its manufacturing site directly to Autolinks assembly operations are possible. Original Wire Quote: Unit price = 30 Packing costs = 0.75 per unit Tooling = 6,000 one-time fixed charge Freight cost = 5.20 per hundred pounds Quote 2 The second quote received is from Happy Lucky Assemblies of Guangdong Province, China. The supplier must pack the harnesses in a container and ship via inland transportation to the port of Shanghai in China, have the shipment transferred to a container ship, ship material to Seattle, and then have material transported inland to Detroit. The quoted unit price does not include international shipping costs, which the buyer will assume. HLA Quote: Unit price = 19.50 Shipping lead time = Eight weeks Tooling = 3,000 In addition to the suppliers quote, Sheila must consider additional costs and information before preparing a comparison of the Chinese suppliers quotation: Each monthly shipment requires three 40-foot containers. Packing costs for containerization = 2 per unit. Cost of inland transportation to port of export = 200 per container. Freight forwarders fee = 100 per shipment (letter of credit, documentation, etc.). Cost of ocean transport = 4,000 per container. This has risen significantly in recent years due to a shortage of ocean freight capacity. Marine insurance = 0.50 per 100 of shipment. U.S. port handling charges = 1,200 per container. This fee has also risen considerably this year, due to increased security. Ports have also been complaining that the charges may increase in the future. Customs duty = 5% of unit cost. Customs broker fees per shipment = 300. Transportation from Seattle to Detroit = 18.60 per hundred pounds. Need to warehouse at least four weeks of inventory in Detroit at a warehousing cost of 1.00 per cubic foot per month, to compensate for lead time uncertainty. Sheila must also figure the costs associated with committing corporate capital for holding inventory. She has spoken to some accountants, who typically use a corporate cost of capital rate of 15%. Cost of hedging currencybroker fees = 400 per shipment Additional administrative time due to international shipping = 4 hours per shipment 25 per hour (estimated) At least two five-day visits per year to travel to China to meet with supplier and provide updates on performance and shipping = 20,000 per year (estimated) The international sourcing costs must be absorbed by Sheila, as the supplier does not assume any of the additional estimated costs and invoice Sheila later, or build the costs into a revised unit price. Sheila feels that the U.S. supplier is probably less expensive, even though it quoted a higher price. Sheila also knows that this is a standard technology that is unlikely to change during the next three years, but which could be a contract that extends multiple years out. There is also a lot of hall talk amongst the engineers on her floor about next-generation automotive electronics, which will completely eliminate the need for wire harnesses, which will be replaced by electronic components that are smaller, lighter, and more reliable. She is unsure about how to calculate the total costs for each option, and she is even more unsure about how to factor these other variables into the decision. Calculate the total cost per unit of purchasing from Original Wire.The Global Sourcing Wire Harness Decision Sheila Austin, a buyer at Autolink, a Detroit-based producer of subassemblies for the automotive market, has sent out requests for quotations for a wiring harness to four prospective suppliers. Only two of the four suppliers indicated an interest in quoting the business: Original Wire (Auburn Hills, MI) and Happy Lucky Assemblies (HLA) of Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a month. Both suppliers will incur some costs to retool for this particular harness. The harnesses will be prepackaged in 24 12 6-inch cartons. Each packaged unit weighs approximately 10 pounds. Quote 1 The first quote received is from Original Wire. Auburn Hills is about 20 miles from Autolinks corporate headquarters, so the quote was delivered in person. When Sheila went down to the lobby, she was greeted by the sales agent and an engineering representative. After the quote was handed over, the sales agent noted that engineering would be happy to work closely with Autolink in developing the unit and would also be interested in future business that might involve finding ways to reduce costs. The sales agent also noted that they were hungry for business, as they were losing a lot of customers to companies from China. The quote included unit price, tooling, and packaging. The quoted unit price does not include shipping costs. Original Wire requires no special warehousing of inventory, and daily deliveries from its manufacturing site directly to Autolinks assembly operations are possible. Original Wire Quote: Unit price = 30 Packing costs = 0.75 per unit Tooling = 6,000 one-time fixed charge Freight cost = 5.20 per hundred pounds Quote 2 The second quote received is from Happy Lucky Assemblies of Guangdong Province, China. The supplier must pack the harnesses in a container and ship via inland transportation to the port of Shanghai in China, have the shipment transferred to a container ship, ship material to Seattle, and then have material transported inland to Detroit. The quoted unit price does not include international shipping costs, which the buyer will assume. HLA Quote: Unit price = 19.50 Shipping lead time = Eight weeks Tooling = 3,000 In addition to the suppliers quote, Sheila must consider additional costs and information before preparing a comparison of the Chinese suppliers quotation: Each monthly shipment requires three 40-foot containers. Packing costs for containerization = 2 per unit. Cost of inland transportation to port of export = 200 per container. Freight forwarders fee = 100 per shipment (letter of credit, documentation, etc.). Cost of ocean transport = 4,000 per container. This has risen significantly in recent years due to a shortage of ocean freight capacity. Marine insurance = 0.50 per 100 of shipment. U.S. port handling charges = 1,200 per container. This fee has also risen considerably this year, due to increased security. Ports have also been complaining that the charges may increase in the future. Customs duty = 5% of unit cost. Customs broker fees per shipment = 300. Transportation from Seattle to Detroit = 18.60 per hundred pounds. Need to warehouse at least four weeks of inventory in Detroit at a warehousing cost of 1.00 per cubic foot per month, to compensate for lead time uncertainty. Sheila must also figure the costs associated with committing corporate capital for holding inventory. She has spoken to some accountants, who typically use a corporate cost of capital rate of 15%. Cost of hedging currencybroker fees = 400 per shipment Additional administrative time due to international shipping = 4 hours per shipment 25 per hour (estimated) At least two five-day visits per year to travel to China to meet with supplier and provide updates on performance and shipping = 20,000 per year (estimated) The international sourcing costs must be absorbed by Sheila, as the supplier does not assume any of the additional estimated costs and invoice Sheila later, or build the costs into a revised unit price. Sheila feels that the U.S. supplier is probably less expensive, even though it quoted a higher price. Sheila also knows that this is a standard technology that is unlikely to change during the next three years, but which could be a contract that extends multiple years out. There is also a lot of hall talk amongst the engineers on her floor about next-generation automotive electronics, which will completely eliminate the need for wire harnesses, which will be replaced by electronic components that are smaller, lighter, and more reliable. She is unsure about how to calculate the total costs for each option, and she is even more unsure about how to factor these other variables into the decision. Based on the total cost per unit, which supplier should Sheila recommend?The Global Sourcing Wire Harness Decision Sheila Austin, a buyer at Autolink, a Detroit-based producer of subassemblies for the automotive market, has sent out requests for quotations for a wiring harness to four prospective suppliers. Only two of the four suppliers indicated an interest in quoting the business: Original Wire (Auburn Hills, MI) and Happy Lucky Assemblies (HLA) of Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a month. Both suppliers will incur some costs to retool for this particular harness. The harnesses will be prepackaged in 24 12 6-inch cartons. Each packaged unit weighs approximately 10 pounds. Quote 1 The first quote received is from Original Wire. Auburn Hills is about 20 miles from Autolinks corporate headquarters, so the quote was delivered in person. When Sheila went down to the lobby, she was greeted by the sales agent and an engineering representative. After the quote was handed over, the sales agent noted that engineering would be happy to work closely with Autolink in developing the unit and would also be interested in future business that might involve finding ways to reduce costs. The sales agent also noted that they were hungry for business, as they were losing a lot of customers to companies from China. The quote included unit price, tooling, and packaging. The quoted unit price does not include shipping costs. Original Wire requires no special warehousing of inventory, and daily deliveries from its manufacturing site directly to Autolinks assembly operations are possible. Original Wire Quote: Unit price = 30 Packing costs = 0.75 per unit Tooling = 6,000 one-time fixed charge Freight cost = 5.20 per hundred pounds Quote 2 The second quote received is from Happy Lucky Assemblies of Guangdong Province, China. The supplier must pack the harnesses in a container and ship via inland transportation to the port of Shanghai in China, have the shipment transferred to a container ship, ship material to Seattle, and then have material transported inland to Detroit. The quoted unit price does not include international shipping costs, which the buyer will assume. HLA Quote: Unit price = 19.50 Shipping lead time = Eight weeks Tooling = 3,000 In addition to the suppliers quote, Sheila must consider additional costs and information before preparing a comparison of the Chinese suppliers quotation: Each monthly shipment requires three 40-foot containers. Packing costs for containerization = 2 per unit. Cost of inland transportation to port of export = 200 per container. Freight forwarders fee = 100 per shipment (letter of credit, documentation, etc.). Cost of ocean transport = 4,000 per container. This has risen significantly in recent years due to a shortage of ocean freight capacity. Marine insurance = 0.50 per 100 of shipment. U.S. port handling charges = 1,200 per container. This fee has also risen considerably this year, due to increased security. Ports have also been complaining that the charges may increase in the future. Customs duty = 5% of unit cost. Customs broker fees per shipment = 300. Transportation from Seattle to Detroit = 18.60 per hundred pounds. Need to warehouse at least four weeks of inventory in Detroit at a warehousing cost of 1.00 per cubic foot per month, to compensate for lead time uncertainty. Sheila must also figure the costs associated with committing corporate capital for holding inventory. She has spoken to some accountants, who typically use a corporate cost of capital rate of 15%. Cost of hedging currencybroker fees = 400 per shipment Additional administrative time due to international shipping = 4 hours per shipment 25 per hour (estimated) At least two five-day visits per year to travel to China to meet with supplier and provide updates on performance and shipping = 20,000 per year (estimated) The international sourcing costs must be absorbed by Sheila, as the supplier does not assume any of the additional estimated costs and invoice Sheila later, or build the costs into a revised unit price. Sheila feels that the U.S. supplier is probably less expensive, even though it quoted a higher price. Sheila also knows that this is a standard technology that is unlikely to change during the next three years, but which could be a contract that extends multiple years out. There is also a lot of hall talk amongst the engineers on her floor about next-generation automotive electronics, which will completely eliminate the need for wire harnesses, which will be replaced by electronic components that are smaller, lighter, and more reliable. She is unsure about how to calculate the total costs for each option, and she is even more unsure about how to factor these other variables into the decision. Calculate the total cost per unit of purchasing from Happy Lucky Assemblies.
- The Global Sourcing Wire Harness Decision Sheila Austin, a buyer at Autolink, a Detroit-based producer of subassemblies for the automotive market, has sent out requests for quotations for a wiring harness to four prospective suppliers. Only two of the four suppliers indicated an interest in quoting the business: Original Wire (Auburn Hills, MI) and Happy Lucky Assemblies (HLA) of Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a month. Both suppliers will incur some costs to retool for this particular harness. The harnesses will be prepackaged in 24 12 6-inch cartons. Each packaged unit weighs approximately 10 pounds. Quote 1 The first quote received is from Original Wire. Auburn Hills is about 20 miles from Autolinks corporate headquarters, so the quote was delivered in person. When Sheila went down to the lobby, she was greeted by the sales agent and an engineering representative. After the quote was handed over, the sales agent noted that engineering would be happy to work closely with Autolink in developing the unit and would also be interested in future business that might involve finding ways to reduce costs. The sales agent also noted that they were hungry for business, as they were losing a lot of customers to companies from China. The quote included unit price, tooling, and packaging. The quoted unit price does not include shipping costs. Original Wire requires no special warehousing of inventory, and daily deliveries from its manufacturing site directly to Autolinks assembly operations are possible. Original Wire Quote: Unit price = 30 Packing costs = 0.75 per unit Tooling = 6,000 one-time fixed charge Freight cost = 5.20 per hundred pounds Quote 2 The second quote received is from Happy Lucky Assemblies of Guangdong Province, China. The supplier must pack the harnesses in a container and ship via inland transportation to the port of Shanghai in China, have the shipment transferred to a container ship, ship material to Seattle, and then have material transported inland to Detroit. The quoted unit price does not include international shipping costs, which the buyer will assume. HLA Quote: Unit price = 19.50 Shipping lead time = Eight weeks Tooling = 3,000 In addition to the suppliers quote, Sheila must consider additional costs and information before preparing a comparison of the Chinese suppliers quotation: Each monthly shipment requires three 40-foot containers. Packing costs for containerization = 2 per unit. Cost of inland transportation to port of export = 200 per container. Freight forwarders fee = 100 per shipment (letter of credit, documentation, etc.). Cost of ocean transport = 4,000 per container. This has risen significantly in recent years due to a shortage of ocean freight capacity. Marine insurance = 0.50 per 100 of shipment. U.S. port handling charges = 1,200 per container. This fee has also risen considerably this year, due to increased security. Ports have also been complaining that the charges may increase in the future. Customs duty = 5% of unit cost. Customs broker fees per shipment = 300. Transportation from Seattle to Detroit = 18.60 per hundred pounds. Need to warehouse at least four weeks of inventory in Detroit at a warehousing cost of 1.00 per cubic foot per month, to compensate for lead time uncertainty. Sheila must also figure the costs associated with committing corporate capital for holding inventory. She has spoken to some accountants, who typically use a corporate cost of capital rate of 15%. Cost of hedging currencybroker fees = 400 per shipment Additional administrative time due to international shipping = 4 hours per shipment 25 per hour (estimated) At least two five-day visits per year to travel to China to meet with supplier and provide updates on performance and shipping = 20,000 per year (estimated) The international sourcing costs must be absorbed by Sheila, as the supplier does not assume any of the additional estimated costs and invoice Sheila later, or build the costs into a revised unit price. Sheila feels that the U.S. supplier is probably less expensive, even though it quoted a higher price. Sheila also knows that this is a standard technology that is unlikely to change during the next three years, but which could be a contract that extends multiple years out. There is also a lot of hall talk amongst the engineers on her floor about next-generation automotive electronics, which will completely eliminate the need for wire harnesses, which will be replaced by electronic components that are smaller, lighter, and more reliable. She is unsure about how to calculate the total costs for each option, and she is even more unsure about how to factor these other variables into the decision. Are there any other issues besides cost that Sheila should evaluate?Avion, Inc. Susan Dey and Bill Mifflin, procurement managers at Avion, Inc., sat across from each other and reviewed a troubling performance report concerning a key supplier, Foster Technologies. The report detailed the deteriorating performance of Foster Technologies in the areas of material quality and on-time delivery. At this point, Kevin ODonnell, another procurement manager, entered the room. Why can changes within a supply chain disrupt the normal flow of goods and services within a supply chain?Sharjah: Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa, announced its financial and operational results for the first half of this year ending June 30, 2020, as the global aviation industry continues to battle the impact of COVID-19. Air Arabia registered a net loss of AED169 million, a direct result of second-quarter performance being heavily impacted by COVID-19 and the subsequent cancellation of scheduled flight operations. The company’s turnover for the first six months of 2020 registered AED1.021 billion, a drop of 53 per cent compared to AED2.173 billion in the corresponding period last year. Air Arabia served a total of 2.48 million passengers from all its four hubs in the first half of 2020, a drop of 57 per cent compared to the first half of 2019. The first half of 2020 results were largely driven by the second quarter that witnessed the most severe impact of COVID-19 on airlines operation. The regular flight schedule was affected…
- In order to suppress the spread of a viral disease, the government has resorted to nonpharmaceutical interventions (NPIs) that restrict the mobility of individuals such as quarantine and lockdown. Provide an economic framework, based on private and social benefits and costs that could guide the government in selecting the appropriate form and level of NPI. In the absence of a highly contagious disease, an individual engaging in activity x does not externalize any cost to others. In the presence of the disease, then an infected individual can transmit the disease to others during the performance of his or her activities. Suppose that there are three kinds of individuals: the uninfected, the infected and symptomatic, and the infected but asymptomatic. Would there be differences in the marginal social benefit of restricting activity for the three individuals? If yes, how are they different from each other?MAG Petroleum is an SME specialising in the sale of lubricants for industrial use. The company, which is owned and operated by Angelina, has just completed its third year operation. During this time, Angelina has sought to establish a reputation for the company as a supplier of high-quality lubricants. The efforts made by Angelina and her staff have proved successful, and her company has become one of the best and fastest growing privately owned company in Zambia. Angelina has concluded that in order to plan better for the growth of the company in the future, it is necessary to develop assistance that will enable her to forecast lubricant sales by month for up to one year in advance. Angelina has available data on the total lubricant sales that were realized during the previous three years of operation. These data are provided in Table Q2. (a) What forecasting method would you recommend to Angelina? Justify your choice. (b) Forecast sales for January through December of the…SECTION CRead the following extract and then answer the question belowTwo graduates who completed university degree in three years ago decide to start a new business because they have not been able to secure jobs as a result of a significant drop in availability of job opportunities. They agree to engage in a partnership agreement and source business funding from the Government Youth empowerment scheme. They come for help from you on the duties and liabilities of a partner in a partnership agreement. Justify to them the duties and liabilities of a partner in a partnership agreement.