Question 1 5 pts International trade may offer lower unit prices but at a higher risk. Consider the total cost and trade off lower production costs with higher priced transportation and more uncertain delivery schedules. Add in disruptive weather patterns, multi-language requirements, and fluctuating exchange rates; not to mention political turmoil, labor disputes, and unique tariffs and duties. Your analysis will determine if it is worth it. Throughout the world there are only two sources of Schachtel Schmuggel Bannware: CousinsAg, a domestic supplier located in Wahoo, Nebraska Dong Hai Supply, an international supplier located in Chengdu, China Throughout this turnaround, we will ship utilizing Twenty-foot Equivalent Units (TEUS) from each location. Assume the following for all questions: Projected Annual Demand is 21,500 units There are 365 days in a year All product will be shipped to a distribution center in Alliance Fort Worth (AFW) where we will service our customer's needs Inventory carrying cost is 32.2% . A TEU container can hold up to 600 units of our product. The average labor rate in Chengdu is 10.36 Yuan per hour. The average labor rate in Wahoo, Nebraska is $25.30 per hour. Today's exchange rate is 1 CNY China Yuan Renminbi = 0.14646 US Dollar The Harris EOQ formula is Q = SQRT((2*Annual Demand Ordering Cost)/(Inventory Carrying Cost Unit Price)) . Our goal is to maintain a 97.7% service level. We have a deviation in daily sales of 11 units. We cannot buy or hold fractional units of a product Using today's exchange rate, what is the INITIAL PURCHASE COST PER UNIT (in US Dollars) paid to Dong Hai Supply? (Do not include transportation costs) CousinsAg (Wahoo, Nebraska) $85.00 per unit $105 cost to place an order -10 days to process the order Rail shipping cost $1,850.00 per TEU FOB Origin Prepaid to Alliance DC 5 day transit time from Wahoo to Alliance Alliance) 1.14 days Standard deviation (Wahoo to O Between $80.01 and $80.20 Between $80.21 and $80.40 O Between $547.00 and $548.00 Between $12,400.00 and $12,500.00 Between $1,800.00 and $1,820.00 Between $80.41 and $80.60 Unit Purchase Price - Ordering Transportation Transit Times - Dong Hai Supply (Chengdu, China) 547 per unit $182 cost to place an order 15 days to process, manufacture product, and stuff TEU in Chengdu 12,414.5% per TEU to ship FCA Long Beach from Chengdu Rail shipping cost $2,250 per TEU FOB Origin Prepaid Long Beach to Alliance - $325 per TEU import tariffs and duties 1 day rail Chengdu to Shanghai -4 days Port of Shanghai to load -16 days by ship to Port of Long Beach -3 days Port of Long Beach for offload and to clear customs - 4 days transit time from Port of Long Beach to Alliance Standard deviation (Chengdu to Alliance) 3.45 days