A Spanish company is considering moving manufacturing from Spain to Mexico. 3 hours of labor are needed to make the item with Spanish cost of labor 25 Euros per hour and Mexican 5 per hour. Spanish holding cost per week is 2 Euros and Mexican 1.5 Euros. Orders are placed weekly and lead time in Spain is 3 weeks with Mexican lead time 15 weeks. Demand is normally distributed with mean 500 and standard deviation 100 and they use 3 standard deviations as the safety factor.

C)In Spain, what is its holding cost per item?

D) In Mexico, what is its holding cost per item?

E) What would be the change in cost per item is production is moved from Spain to Mexico?

Answer rating: 100% (QA)

C Time taken per item 3 hours 1 week 24 x 7 168 hours It costs 2 Euros fo... View the full answer