Posted by **sam** on Friday, November 8, 2013 at 8:05am.

Suppose that a manufacturer of men's shirts can produce a dress shirt in its Houston, Texas, plant for $8 per shirt (including the cost of raw materials). Chicago is a major market for 100,000 shirts per year. The shirt is priced at $15 at Houston. TransportaÂ¬tion and storage charges from Houston to Chicago amount to $5 per hundredweight (cwt.). Each packaged shirt weighs 1 lb.

As an alternative, the company can have the shirts produced in Taiwan for $4 per shirt (including the cost of raw materials). The raw materials, weighing about 1 lb. per shirt, would be shipped from Houston to Taiwan at a cost of $2 per cwt. When the shirts are completed, they are to be shipped directly to Chicago at transportation and storage cost of $6 per cwt. An import duty of $0.50 per shirt is assessed.

a. From a logistics-production cost standpoint, should the shirts be produced in Taiwan?

b. What additional considerations, other than economic ones, might be considered beÂ¬fore making a final decision?

## Answer this Question

## Related Questions

- math - For a fundrasier, the Best Buddies club sold t-shirts. The adult shirts ...
- math - The Math-Is-Fun T-shirt Company manufactures and sells screen-printed t-...
- algebra 1 - You have $100 to go shopping. A store sells shirts for $15 and dress...
- 11th grade Algebra 2 - Some students want to order shirts with their school logo...
- Math - Andrea has 6 blue shirts, 2 red shirts, and 5 green shirts in her closet...
- math - A t-shirt manufacturer uses 5/8 yard of material for each shirt, how many...
- Algebra 2 - A company can produce T-shirts for $0.99 each. They spent $1,000,000...
- math - teemu's t-shirts designs and manufactures t-shirts for a $15 flat design ...
- math - teemu's t-shirts designs and manufactures t-shirts for a $15 flat design ...
- Algebra - suppose you invest $1500 in equipment to put pictures on t-shirts. you...

More Related Questions