Consider a firm with a plant in the U.S. and the U.K.. A U.S.- based shipper...

 

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Consider a firm with a plant in the U.S. and the U.K.. A U.S.- based shipper charges $1.10 per unit to ship between the two countries. Assume no taxes and consider the following data: Weekly Demand Weekly Capacity Sales Price Production Cost The United States 12,000 20,000 $20.00 $9.50 The United Kingdom 15,000 25,000 £19.00 £8.20 (a) Suppose that the exchange rate is £1.00 $1.32. What is the best production and distribution plan, i.e., how much should be made in each country, and how much should be shipped between countries? (b) Given your plan in part a, what is the profit in each country (expressed in dollars)? Consider a firm with a plant in the U.S. and the U.K.. A U.S.- based shipper charges $1.10 per unit to ship between the two countries. Assume no taxes and consider the following data: Weekly Demand Weekly Capacity Sales Price Production Cost The United States 12,000 20,000 $20.00 $9.50 The United Kingdom 15,000 25,000 £19.00 £8.20 (a) Suppose that the exchange rate is £1.00 $1.32. What is the best production and distribution plan, i.e., how much should be made in each country, and how much should be shipped between countries? (b) Given your plan in part a, what is the profit in each country (expressed in dollars)?

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