A U.S.-based retailer is selling porcelain tile to its customers for $4.00 per square foot. Seeking to
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A U.S.-based retailer is selling porcelain tile to its customers for $4.00 per square foot. Seeking to extend their profit margin, the retailer requests price quotes from suppliers in China. Several respond and one is offering the tile at a bargain rate of $1.50 per square foot. The retailer quickly places an order for 14,000 square feet.
Upon receipt of the tile at their warehouse, the following was their purchase and logistics costs
Activity | Amount |
Invoiced purchase price | $10,500.00 |
Logistics costs | |
Shipping fees and duties | $9,800.00 |
Domestic delivery cost | $4,000.00 |
USDA examination & x-rays | $1800.00 |
Storage container | $3000.00 |
Total Logistics costs | ? |
- What is the total landed cost?
- What is the landed cost per square foot?
- Was placing an order for 14,000 square feet from China the right decision?
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