For my learning and not a assignment question: Tesla, the U.S. electric vehicle manufacturer, has recently proposed to join Indonesia’s initiative to develop an EV battery supply chain within the country. This information was shared by a senior Indonesian government official, who noted that the government received Tesla's proposal on Thursday. Indonesia, known for its rich nickel reserves, is already in discussions with companies like China's Contemporary Amperex Technology (CATL) and South Korea's LG Chem to establish a comprehensive EV battery supply chain that covers everything from raw materials to the final product. Sepian Hari Seto, the deputy for investment and mining at the Coordinating Ministry of Maritime Affairs and Investment, expressed enthusiasm for Tesla's advanced lithium battery technology. He conveyed that the collaboration with Tesla, along with CATL and LG, presents a valuable opportunity for technology transfer and learning. Furthermore, Seto mentioned the potential for partnership in energy storage systems with Tesla, which could serve as alternatives to peaking power plants during high electricity demand periods. He emphasized that Tesla's involvement should extend beyond mere extraction of raw materials. It would be interesting to explore the strategies Tesla may implement in this context.
Q: Management should strive to A. increase Turnover B. decrease Turnover
A: Management must strive to lower turnover because high worker turnover is regularly high priced and…
Q: 12 X1, X230 1 x =0x2 write the Following linear Programming model by 1- general Form Canonical Forms…
A:
Q: 3.3-2. Consider a problem with two decision variables, x₁ and x2, which represent the levels of…
A: To determine whether this problem satisfies the four assumptions of linear programming, let's…
Q: 1.Draw a figure that shows clearly the total cost C(q) of the LTL shipment as a function of…
A: graph for this function.The graph above illustrates the total cost C(q) of LTL shipment as a…
Q: Review the Profit Ratio by Product chart again. What information is uncovered when the data is less…
A: Data is divided into more focused categories (particular products in this case, as opposed to broad…
Q: What is the significance of adverse health outcomes associated with work for the United States?…
A: Adverse health outcomes associated with work have significant implications for the United States.…
Q: How would you design an operations plan and schedule for a new product/service (pick a product of…
A: 1. Approach to Solving the QuestionThe question asks how to design an operations plan and schedule…
Q: The Donald Fertilizer Company produces industrial chemical fertilizers. The projected manufacturing…
A: Let me solve this step by step.1) First, let's calculate total annual demand: Q1: 60,000 gallons…
Q: A store estimates their holding costs at 22% and incurs a fixed cost of $74.00 for each order.…
A: To determine the optimal order quantity and total annual cost, we can use the Economic Order…
Q: provide scholarly references how can the banking and finance sector mitigate against cyber attack…
A: Ways the Banking and Finance Sector Mitigates Against Cyber AttacksAdvanced Threat Detection…
Q: Scenario You have recently been hired as a business analyst for the chief financial officer (CFO) of…
A: Approach to solving the question:Step 1: Comprehend the Existing Payroll Onboarding Procedure…
Q: Please help me
A:
Q: Task: Legal case analysis focused on a legal sale contract (real or hypothetical) The plan should…
A: Legal Case Analysis: A Detailed Examination of a Legal Sale Contract1. Importance of Contracts in…
Q: Blackstone Diary products Limited is a leading producer of dairy products in Western Jamaica.…
A: To represent Blackstone Diary Products Limited's Accounts Receivable (AR) system, we can break it…
Q: PP.63 Jupiter, a large candy company, is having great success with its "Swan" family of candy bars.…
A: First, we need to calculate the total demand for the six months. This is done by adding up the…
Q: Don't use Ai and chatgpt. Answer in step by step with explanation. Vvvbbbb
A: Step 1: Total length of continuous footings Building is 64 feet long and 51 feet wide. We are…
Q: Due Date for submission/ Tarikih terakhir penghantaran: 5 PM on 4/11/2024. i) Using monetary policy…
A: This graph illustrates the IS-LM model during a liquidity trap. The LM curve becomes flat at a low…
Q: Sam's Pet Hotel operates 5050 weeks per year, 66 days per week, and uses a continuous review…
A: To understand the impact of a forecast error on total costs when using the Economic Order Quantity…
Q: Please original work Talk about the role of Information Systems in organizations. How does…
A: Information systems (IS) are vital to contemporary firms because they support and accelerate…
Q: What is the significance of Deming’s quality of conformance category of quality efforts in improving…
A: 1. **Consistency in Product/Service Delivery** - **What It Means**: Quality of conformance ensures…
Q: The network diagram and task times for a project are shown below. Αν A2 A3 A4 A5 Task Α1 Duration…
A:
Q: Oakwood Hospital is considering using ABC analysis to classify laboratory SKUs into three…
A:
Q: Step 3: Q3: Should TechGear place a larger order to receive a discount? The vendor offers a 5%…
A: Scenario 1: EOQ (1,200 units)Ordering Cost: The ordering cost is calculated based on how often…
Q: A sample of 100 cans of coffee showed an average weight of 13 ounces. The population standard…
A: Step 1:Sample size n=100Sample mean xˉ=13Population standard deviation σ=0.8Confidence level = 96% :…
Q: From your experience, what have effective managers done to bring out the best in you and other…
A: **a. Providing Clear Direction and Communication**Effective managers ensure that employees know what…
Q: Describe the functions of international agencies in promoting occupational health and safety.…
A: International agencies, historically significant laws, federal agencies, current national laws, and…
Q: Explain what are safe levels of exposure to excessive noise in your workplace.
A: Noise is measured in units called decibels (dB). The scale goes from 0 dB, which is nearly total…
Q: Scores on an employee performance evaluation are normally distributed with a mean of 75 and a…
A: Step 1: a) Consider a random variable is x, which defines the performance evaluation score of a…
Q: Help answer showing level work and formulas
A: This schema reflects the relationships and constraints as described in the university scenario,…
Q: Identify how each one of these charts Run chart, Gantt Chart, Pareto Chart and Control chart can be…
A: A Run Chart is a simple line graph that displays a sequence of data points over time. In the…
Q: Don't use Ai and chatgpt. Answer in step by step with explanation
A: Give the public confidence in the quality of the service provided.When tax preparers act ethically,…
Q: In a P system, the lead time for a box of weed-killer is twotwo weeks and the review period is…
A:
Q: 1) View the video Service Processing at BuyCostumes (10.41 minutes, Ctrl+Click on the link); what…
A: 1)Given DataWeekSales (000s)119218317420518622720We need to forecast week 8 using the following…
Q: “Most SME owner/managers have limited knowledge in the area of strategic planning. Some indicated…
A: 1. Market Penetration (High Market Growth, High Competitive Position):In a market penetration…
Q: What area of emotional intelligence refers to the ability to manage your emotions, particularly in…
A: Emotional intelligence is the ability to understand, use, and manage your own emotions in positive…
Q: I need typing clear urjent no chatgpt used i will give 5 upvotes pls full explain with diagrams…
A: Approach to solving the question:Well, join me as I talk through these Keynesian economics questions…
Q: The following is given: Price $6.50/unit Variable cost $4.00/unit Fixed cost $56,000 a) Based on the…
A: Question 1. To calculate the break-even point in units, we divide the fixed costs by the…
Q: i need help creating a flow chart for my model in the attachment
A: Source1 | | (Items generated) vQueue1 | | (Waiting area before storage) vASRSvehicle1 /…
Q: (Setup Everywhere) Consider the following batch-flow process consisting of three process steps…
A: The bottleneck occurs when the capacity of a step is lower than the capacities of the steps before…
Q: What is the relevance of being prepared for negotiating techniques during a project to convert 40ft…
A: The project involves converting 40ft containers into offices. This is a complex task that involves…
Q: You are the event manager of a wedding project that is behind schedule and over budget. The client…
A: **1. Prioritizing Additional Features Requested by the Client**The first step is to prioritize the…
Q: A call center facility is to house 175 female and 175 male employees. Using a 50% allowance for…
A: Step 1: Determine Number of Fixtures NeededFor large office buildings or call centers, the number of…
Q: Need a control plan for operation of tobaco manufacturing
A: A control plan for tobacco manufacturing would typically focus on maintaining consistent product…
Q: Please help with the question.
A: Part 1: AnswerARC's Statement Regarding Pay Rate: ARC violated labor law by instructing Mr. Potts to…
Q: Elaborate on the primary obstacles associated with project appraisal
A: **1. Uncertainty in Forecasting** One of the most common obstacles in project appraisal is the…
Q: Barriers to implement for teach back videos for patients
A: Teach-back videos are a method used in healthcare to ensure that patients understand their medical…
Q: In this problem, your company is a distributor of products. You serve as an inventory manager for…
A: Step 4: Compute Total Logistics Costs for Full Truckloads (q = 700 units)1. Storage cost per unit…
Q: use huawei as example Chapter 2: Detail description of the industry and industry analysis…
A: Approach to solving the question:Step 1: Performing a Thorough Industry AnalysisThe initial phase…
Q: The National Strategy Office (NSO) is mandated to coordinate the development and implementation of…
A: (a) Advantages of Strategic Planning with NSO ExamplesStrategic planning provides a structured…
Q: Not use ai please
A: One of the first steps to encourage ethical leadership in large corporations is to establish a clear…
For my learning and not a assignment question:
Tesla, the U.S. electric vehicle manufacturer, has recently proposed to join Indonesia’s initiative to develop an EV battery supply chain within the country. This information was shared by a senior Indonesian government official, who noted that the government received Tesla's proposal on Thursday.
Indonesia, known for its rich nickel reserves, is already in discussions with companies like China's Contemporary Amperex Technology (CATL) and South Korea's LG Chem to establish a comprehensive EV battery supply chain that covers everything from raw materials to the final product.
Sepian Hari Seto, the deputy for investment and mining at the Coordinating Ministry of Maritime Affairs and Investment, expressed enthusiasm for Tesla's advanced lithium battery technology. He conveyed that the collaboration with Tesla, along with CATL and LG, presents a valuable opportunity for technology transfer and learning.
Furthermore, Seto mentioned the potential for
It would be interesting to explore the strategies Tesla may implement in this context.
Step by step
Solved in 2 steps
- In the summer of 2017, Transport of London (TfL) began proceedings to revoke Ubers permit to operate in London. How do think Ubers poor corporate reputation may have been a factor in TfLs thinking?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?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.
- Amazon has entered into the brick-and-mortar store business with the acquisition of Whole Foods. Do you think this is a good move or a bad move for Amazon? Why?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. 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. 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. Are there any other issues besides cost that Sheila should evaluate?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?
