Recently, Abercrombie & Fitch (A&F) began shifting a large poPLION costs have been cut dramatically, but shipment times have gone from days to weeks. In addition to having less control over inventoly fashion changes, the holding costs have risen for the goods in transport. Meanwhile, Central America might offer an inexpensive manufacturing alternative that mic reduce shipping time through the Panama Canal to, say, 8 days, compared to, say, 25 days from Asia. Suppose that A&F uses an annual holding rate 30%. Suppo further that the product costs $20 to produce in Asia. Assuming that the transportation cost via ocean linear would be approximately the same whether coming fro Asia or Central America, what would the maximum production cost in Central America need to be in order for that to be a competitive source compared to the Asiar producer? The maximum production cost in Central America should be $ (round your response to two decimal places).
Recently, Abercrombie & Fitch (A&F) began shifting a large poPLION costs have been cut dramatically, but shipment times have gone from days to weeks. In addition to having less control over inventoly fashion changes, the holding costs have risen for the goods in transport. Meanwhile, Central America might offer an inexpensive manufacturing alternative that mic reduce shipping time through the Panama Canal to, say, 8 days, compared to, say, 25 days from Asia. Suppose that A&F uses an annual holding rate 30%. Suppo further that the product costs $20 to produce in Asia. Assuming that the transportation cost via ocean linear would be approximately the same whether coming fro Asia or Central America, what would the maximum production cost in Central America need to be in order for that to be a competitive source compared to the Asiar producer? The maximum production cost in Central America should be $ (round your response to two decimal places).
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 14E: Global Reach, Inc., is considering opening a new warehouse to serve the Southwest region. Darnell...
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