Problem$1$:

As a purchasing manager, you are required to compare the landed price for the shipment of designer plastic cups from Mumbai, India to a local supplier in Dayton, Ohio. The cost to buy the designer cups from the local supplier in Dayton, OH is $$0\mathrm{.}45$ per cup.

Details of the shipment from our Mumbai, India supplier are provided below:

Our company has purchased $100,000$ units of designer plastic cups for $($Rupees$)20$ per unit. Our contract with the supplier is Ex$-$Works.$$ That means, we are required to pay for transportation of a container load from the factory in Mumbai to the Jawaharlal Nehru Port $($JNPT$),$ Handling fees at the port, which include documentation and customs fees. To avoid any shipping delays, we have hired a local freight forwarder who charges us $50000($Rupees$)$ for completing all of these formalities needed for export. The transportation charge from the factory in Mumbai to the port is Rs$\mathrm{.}10,000$ per $20$ FTE full truck load $($FTL can hold $50,000$ units of designer cups$).$ The cost for the ocean freight is $$2500$ for each container being shipped. The terminal handling, import documentation, port fees, and line haulage from the Port of Baltimore to York, PA will cost us $$1500$ per container load. The import duty on designer plastic cups is $6\mathrm{.}5\%$ of the purchase value.$$

$[8$ pts$]$ Based on your comparison, which supplier would you decide on$?$

$[2$ pts$]$ Provide your reasons for the above choice.

$[5$ pts$]$ Under what conditions would the alternative decision become more feasible? To obtain full credit, provide both qualitative and quantitative rationale to support your response.