3. A company in the US has traditionally been outsourcing toy production to Vietnam The table below shows the cost breakdown of its total landed cost on DDP Cost components $ $ $ $ $ $ $ Process Product price at factory Transport to port Customs clearance documentation at Vietnam port Ocean freight Insurance for ocean freight Customs duties at US port (assume 10% average) Inland trucking within US per trip Total landed cost 8,000 500 50 1.000 ms. 160 800 300 10.810 The company is looking into the use of robotics and automation to make the toys in the US. What is the maximum production price of the factory in order to be cost competitive with the import from Vietnam

3. A company in the US has traditionally been outsourcing toy production to Vietnam The table below shows the cost breakdown of its total landed cost on DDP Cost components $ $ $ $ $ $ $ Process Product price at factory Transport to port Customs clearance documentation at Vietnam port Ocean freight Insurance for ocean freight Customs duties at US port (assume 10% average) Inland trucking within US per trip Total landed cost 8,000 500 50 1.000 ms. 160 800 300 10.810 The company is looking into the use of robotics and automation to make the toys in the US. What is the maximum production price of the factory in order to be cost competitive with the import from Vietnam

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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