On March 11, 2011, Japan was hit by a magnitude 9.0 earthquake, which subsequently produced a devastating tsunami. The effects of these events were numerous, including entire towns being leveled, nearly 500,000 people displaced, a nuclear power plant in critical condition, and thousands of lives tragically lost. The earthquake was one of the largest in modern history, and although difficult to estimate, it could cost nearly $300 billion to clean up. His group currently has a plant in Japan. While the All-star plant is not located in the area most affected by this disaster, just imagine the destruction of the infrastructure. Roads, trains, airports, power grids, buildings, all of these things need serious repairs, affecting companies' supply chains. Additionally, there are major concerns about water safety due to a possible nuclear reactor meltdown that could leak into groundwater sources. Its Japanese plant serves the Japanese and Korean markets. Currently, production at its plant in Japan is 200 million units per year. Demand for next year will be 100 million units in Japan and 100 million units in Korea. Manufacturing costs in Japan will increase by 10% due to damaged infrastructure. Production is expected to decrease by 25% next year due to this disaster (i.e. its capacity next year will drop by 25%). As a result, it will still be able to meet all of Japan's demand from the local plant. Korea, however, will have to source products from both Japan and local plants. How will this scenario affect your total destination cost (cost + freight + fee in USD) for next year?

Plant location	Home	Japan
Average COGS Unit ($)	0,53	0,46
A:
South Korea
Shipment	0.06	0.02
COGS + Shipping	0.59	0.48
rate %	0.08	0.08
Fee $	0.0472	0.0384
Total unit discharge cost (COGS + Shipping + Fee	0.6372	0.5184
A:
Japan
Shipment	0.060	0.01
COGS + Shipping	0.590	0.47
rate %	0,00%
Fee $	0.000	0
Total unit discharge cost (COGS + Shipping + Fee)	0.590	0.47

Answer rating: 100% (QA)

SOLUTION To calculate the total destination cost for next year in this scenario we need to consider the changes in production capacity manufacturing c... View the full answer