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A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $4.0 per week in the United States and $3.5 per week in Taiwan. The lead time with U.S. production is 2 week, whereas it is 8 weeks with production in Taiwan. In addition, it costs $2.50 to ship laptops to the United States from Taiwan. Weekly demand is 1,200 laptops, with a standard deviation of 1,000. a. What is the per unit holding cost of a laptop with U.S. production? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost 900.00 per unit b. What is the per unit holding cost of a laptop with production in Taiwan? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost $ Change in cost 78.75 per unit c. A laptop requires 30 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $44 per hour, while in Taiwan it is $12. What is the change in cost per laptop if it switches production to Taiwan? Note: Round intermediate calculations to 2 decimal places. Round your answer to 2 decimal places. 16.00 per unit

A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $4.0 per week in the United States and $3.5 per week in Taiwan. The lead time with U.S. production is 2 week, whereas it is 8 weeks with production in Taiwan. In addition, it costs $2.50 to ship laptops to the United States from Taiwan. Weekly demand is 1,200 laptops, with a standard deviation of 1,000. a. What is the per unit holding cost of a laptop with U.S. production? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost 900.00 per unit b. What is the per unit holding cost of a laptop with production in Taiwan? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost $ Change in cost 78.75 per unit c. A laptop requires 30 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $44 per hour, while in Taiwan it is $12. What is the change in cost per laptop if it switches production to Taiwan? Note: Round intermediate calculations to 2 decimal places. Round your answer to 2 decimal places. 16.00 per unit

Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter2: The Purchasing Process
Section: Chapter Questions
Problem 1GPE
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A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $4.0 per week in the United States and $3.5 per week in Taiwan. The lead time with US. production is 2 week, whereas it is 8 weeks with production in Taiwan. In addition, it costs $2.50 to ship laptops to the United States from Taiwan. Weekly demand is 1,200 laptops, with a standard deviation of 1,000. a. What is the per unit holding cost of a laptop with U.S. production? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost $900.00 per unit b. What is the per unit holding cost of a laptop with production in Taiwan? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost S Change in cost c. A laptop requires 30 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $44 per hour, while in Taiwan it is $12. What is the change in cost per laptop if it switches production to Taiwan? Note: Round intermediate calculations to 2 decimal places. Round your answer to 2 decimal places. 78.75 per unit S 16.00 per unit
Transcribed Image Text:A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $4.0 per week in the United States and $3.5 per week in Taiwan. The lead time with US. production is 2 week, whereas it is 8 weeks with production in Taiwan. In addition, it costs $2.50 to ship laptops to the United States from Taiwan. Weekly demand is 1,200 laptops, with a standard deviation of 1,000. a. What is the per unit holding cost of a laptop with U.S. production? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost $900.00 per unit b. What is the per unit holding cost of a laptop with production in Taiwan? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost S Change in cost c. A laptop requires 30 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $44 per hour, while in Taiwan it is $12. What is the change in cost per laptop if it switches production to Taiwan? Note: Round intermediate calculations to 2 decimal places. Round your answer to 2 decimal places. 78.75 per unit S 16.00 per unit
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