Really need help with the math! please help me solve this problem

1. Using the data given, calculate for EACH location (New Orleans, Bordeaux, and Tel Aviv): 1. TOTAL Cost of Producing 100,000 Window units. (5 Points) 2. Cost of Producing ONE unit. (1 Point) 3. TOTAL Cost of Distributing, based on the actual demand stated in the case for the four markets (i.e., 35,000 to France, 25,000 to Spain, 20.000 to ltaly and 20,000 to Israel). (10 Points) 4. TOTAL. Supply Chain Costs (i.e., Production + Distribution). (2 Point) Please upload your spreadsheet. Southern Air Conditioning, Inc. Going International1 Introduction: Southern Air Conditioning, Incorporated (SAI) is a specialized air conditioning firm located in New Orleans, Loubiana. The company was founded in 1980 and has enjoyed success and modest growth as a supplier of component parts to large manufacturers of consumer and industrial air conditioning units. Recently, the company's management decided to begin manufacturing and marketing a window AKC unit product. A window A/C unit is produced by assembling two component parts: Cooling Units, which can be purchased from a company in Belgium, and Compressors, which SAl produces at its New Orleans facility. SAl has manufactured and supplied compressors to several national window A/C unit manufacturers since 1980. Most of the consumer demand for window A/C units comes from areas, which enjoy a relatively cool climate throughout the year. Accordingly, the window AVC unit manufacturers have sold their product with great success throughout the northern and northeastern United States. The 1990's proved especially rewarding for window AVC unit manufacturers, as the growth of the economy contributed greatly to the success of the window Ac unit as a consumer product. The man largely responsible for SA's proposed move into window AlC units is its President, John H. Hodges. Hodges has spent his entire career in air conditioning, and his reign as SA's president has been very successful. Hodges entered the air conditioning business in 1960 after being trained while serving in the Army during World War H. He joined 5.Al in 1981 and has served as its President since 1988 . Hodges has witnessed the impressive sales record of the window AVC unit, with a certain amount of mixed feelings. As a supplier of compressors, SAI has prospered as a result of the window AC unit boom. Although pleased by SAl's compressor sales, Hodges has always felt that his company was not reaping all of the benefits avallable in the air conditioning market. Hodges wanted to move into the consumer air conditioning market, specifically window AC units, but he fele that SA did not have the resources to compete successfully with the large firms that dominate the U.S. market. He was also very interested in getting in on the growing trend for global business. Examining International Operations Hodges employed a consultant to determine where consumer demand for window AK units would approach that of the northern and northeastern United States. After reviewing the consultant's recommendations, Hodges decided that 5A should target its marketing efforts at the Mediterranean region, beginning with the countries of Spain, Portugal, France 8 It Italy, with 1 Revised and adapted by Dr. Gary N. Dicer, Unversity of Tennessee (Sept. 1993) from a case originaly writen by Mr. Frank C. Burinsky and Dr. Michael A. Mc Ginnik. Shippensburg University. possible sales to Israel as well. This area, because of its temperate climate, lack of central home air units, and dense population, had the potential to be a lucrative market for SAl's window A/C units. In addition, the consolidation of the European Community by the end of 2002, and the developments in Central Europe, would open other markets to those firms with established operations in the area. The consultant also recommended three options avalable to 5Al as to how the window AlC units could be produced and distributed for the European \& Middle Eastern markets: 1. Assemble the window A/C units at the SAI plant in New Orleans and distribute them from that point. 2. Assemble the window A/C units in a Free-Trade Zone (FTZ) in Bordeaux, France and distribute them from that point. 3. Assemble the window A/C units in a Free-Trade Zone (FIZ) in Tel Aviv, Israel and distribute from that point. Hodges held a meeting to brief his production manager, Deanne R. Richardson, and his distribution manager, Chris Q. Orange, on the window A/C unit venture and the consultant's recommendations. Richardson has been with SAl for nine years after receiving her degree in Operations Research from the Texas A\&M University. Orange never completed college after being drafted into the Army during the early 1970 's. He has been in the distribution department of SAI for eighteen years. After briefing the two managers, Hodges asked, "What course of action would you two suggest we take? Richardson replied, "it will probably be most advantageous to assemble the window A/C units where labor costs would be minimized," "Please pardon my interruption, Miss Richardson", injected an impatient Orange, "but there are many other considerations that must be examined here. Transportation rates, insurance rates, import duties and free-trade zones must also be considered." "Mr. Orange," said Miss Richardson, "you have made me realize that my emphasis on production costs was very shortsighted. Distribution costs are critical in this type of decision, especially when great distances are involved. Everything you mentioned is certainly relevant to our situation, but 1 am not sure that I understand the meaning of a "Free-Trade Zone." Could you please explain?" "Certainly, Deanne," said Orange. "A free-trade zone or FIZ is an area where manufacturers are granted partial immunity from customs regulations. Because of this, FTZs are becoming increasingly popular as locations for assembly and additional manufacturing activity. When work is performed in a free-trade zone, import duties are assessed only on the lower import cost and not the higher value created by work performed within the zone." Chris continued, "Additionally, items can be left in an FIZ for several months, but any duty will not be due until the items leave the zone. While the duty must still be paid, the company has in effect received free financing for the time the items spent in the zone." Chris concluded, "Cenerally, no duties are charged at all on goods that are brought into a free-trade zone and then subsequently re-exported from the country." "Very well, Mr. Orange," said Hodges, "it seems to me that you and Miss Richardson both have a firm grasp on what will be required for success in this venture. I would like you two to work together to compile the information necessary for us to make the best possible decision." After two weeks, 37 telephone calls, four meetings, an argument with Mr. Pickey in the Accounting Department over the "accuracy" of their cost figures, and a 4 A.M. telephone call from a French window A/C unit broker who somehow got wind of SAI's interest in the European market (and Hodges home telephone number), the necessary information had been compiled. Their information is summarized as Exhibit 1 and Exhibit 2. Exhibit 1 Combined Rates for Transportation (in s/CWT) and Insurance Between Respective Points (either direction) fuhbet a Cote, Demand, Weight, A Taritf Data Anrual dernand for window Ak thice in: Irport outies (as a percent of the prisoluct tramaction vilu). messed on "vamaction walue" or the price actusly pud for the gopen in the cbintery at eaport. For putpoues of this caie the "proctuct purthase price" mouls tae the abpraprase fos traraictien viluation dof Cobirg thits, Compretaors, and Complested Windge A . unht. For euample, in the cane of the sarpleted mindow Nt Unit it woild be the fotal cout at the plant indualing the puats, laber, and decan tranepertatian coste. tugalEuroptimcotrmantyUnibedstatesasttatst Soon Therutos, Dearme, Chris, and one of the tmpers iram the corperyate lecal atalimet in Deanne ksested that "iryone whe an iQ of three conld see than the obwious solifion moult be ta atiemble the aindow Ak units in fel Avit ance lasor ratim there are lower." the IS.5, and the EC. frarice't tarmith in the ahalyoh, mortt met and we wil meet tomemsew at 9 a m. tharp to dicuss your findings." 1. Using the data given, calculate for EACH location (New Orleans, Bordeaux, and Tel Aviv): 1. TOTAL Cost of Producing 100,000 Window units. (5 Points) 2. Cost of Producing ONE unit. (1 Point) 3. TOTAL Cost of Distributing, based on the actual demand stated in the case for the four markets (i.e., 35,000 to France, 25,000 to Spain, 20.000 to ltaly and 20,000 to Israel). (10 Points) 4. TOTAL. Supply Chain Costs (i.e., Production + Distribution). (2 Point) Please upload your spreadsheet. Southern Air Conditioning, Inc. Going International1 Introduction: Southern Air Conditioning, Incorporated (SAI) is a specialized air conditioning firm located in New Orleans, Loubiana. The company was founded in 1980 and has enjoyed success and modest growth as a supplier of component parts to large manufacturers of consumer and industrial air conditioning units. Recently, the company's management decided to begin manufacturing and marketing a window AKC unit product. A window A/C unit is produced by assembling two component parts: Cooling Units, which can be purchased from a company in Belgium, and Compressors, which SAl produces at its New Orleans facility. SAl has manufactured and supplied compressors to several national window A/C unit manufacturers since 1980. Most of the consumer demand for window A/C units comes from areas, which enjoy a relatively cool climate throughout the year. Accordingly, the window AVC unit manufacturers have sold their product with great success throughout the northern and northeastern United States. The 1990's proved especially rewarding for window AVC unit manufacturers, as the growth of the economy contributed greatly to the success of the window Ac unit as a consumer product. The man largely responsible for SA's proposed move into window AlC units is its President, John H. Hodges. Hodges has spent his entire career in air conditioning, and his reign as SA's president has been very successful. Hodges entered the air conditioning business in 1960 after being trained while serving in the Army during World War H. He joined 5.Al in 1981 and has served as its President since 1988 . Hodges has witnessed the impressive sales record of the window AVC unit, with a certain amount of mixed feelings. As a supplier of compressors, SAI has prospered as a result of the window AC unit boom. Although pleased by SAl's compressor sales, Hodges has always felt that his company was not reaping all of the benefits avallable in the air conditioning market. Hodges wanted to move into the consumer air conditioning market, specifically window AC units, but he fele that SA did not have the resources to compete successfully with the large firms that dominate the U.S. market. He was also very interested in getting in on the growing trend for global business. Examining International Operations Hodges employed a consultant to determine where consumer demand for window AK units would approach that of the northern and northeastern United States. After reviewing the consultant's recommendations, Hodges decided that 5A should target its marketing efforts at the Mediterranean region, beginning with the countries of Spain, Portugal, France 8 It Italy, with 1 Revised and adapted by Dr. Gary N. Dicer, Unversity of Tennessee (Sept. 1993) from a case originaly writen by Mr. Frank C. Burinsky and Dr. Michael A. Mc Ginnik. Shippensburg University. possible sales to Israel as well. This area, because of its temperate climate, lack of central home air units, and dense population, had the potential to be a lucrative market for SAl's window A/C units. In addition, the consolidation of the European Community by the end of 2002, and the developments in Central Europe, would open other markets to those firms with established operations in the area. The consultant also recommended three options avalable to 5Al as to how the window AlC units could be produced and distributed for the European \& Middle Eastern markets: 1. Assemble the window A/C units at the SAI plant in New Orleans and distribute them from that point. 2. Assemble the window A/C units in a Free-Trade Zone (FTZ) in Bordeaux, France and distribute them from that point. 3. Assemble the window A/C units in a Free-Trade Zone (FIZ) in Tel Aviv, Israel and distribute from that point. Hodges held a meeting to brief his production manager, Deanne R. Richardson, and his distribution manager, Chris Q. Orange, on the window A/C unit venture and the consultant's recommendations. Richardson has been with SAl for nine years after receiving her degree in Operations Research from the Texas A\&M University. Orange never completed college after being drafted into the Army during the early 1970 's. He has been in the distribution department of SAI for eighteen years. After briefing the two managers, Hodges asked, "What course of action would you two suggest we take? Richardson replied, "it will probably be most advantageous to assemble the window A/C units where labor costs would be minimized," "Please pardon my interruption, Miss Richardson", injected an impatient Orange, "but there are many other considerations that must be examined here. Transportation rates, insurance rates, import duties and free-trade zones must also be considered." "Mr. Orange," said Miss Richardson, "you have made me realize that my emphasis on production costs was very shortsighted. Distribution costs are critical in this type of decision, especially when great distances are involved. Everything you mentioned is certainly relevant to our situation, but 1 am not sure that I understand the meaning of a "Free-Trade Zone." Could you please explain?" "Certainly, Deanne," said Orange. "A free-trade zone or FIZ is an area where manufacturers are granted partial immunity from customs regulations. Because of this, FTZs are becoming increasingly popular as locations for assembly and additional manufacturing activity. When work is performed in a free-trade zone, import duties are assessed only on the lower import cost and not the higher value created by work performed within the zone." Chris continued, "Additionally, items can be left in an FIZ for several months, but any duty will not be due until the items leave the zone. While the duty must still be paid, the company has in effect received free financing for the time the items spent in the zone." Chris concluded, "Cenerally, no duties are charged at all on goods that are brought into a free-trade zone and then subsequently re-exported from the country." "Very well, Mr. Orange," said Hodges, "it seems to me that you and Miss Richardson both have a firm grasp on what will be required for success in this venture. I would like you two to work together to compile the information necessary for us to make the best possible decision." After two weeks, 37 telephone calls, four meetings, an argument with Mr. Pickey in the Accounting Department over the "accuracy" of their cost figures, and a 4 A.M. telephone call from a French window A/C unit broker who somehow got wind of SAI's interest in the European market (and Hodges home telephone number), the necessary information had been compiled. Their information is summarized as Exhibit 1 and Exhibit 2. Exhibit 1 Combined Rates for Transportation (in s/CWT) and Insurance Between Respective Points (either direction) fuhbet a Cote, Demand, Weight, A Taritf Data Anrual dernand for window Ak thice in: Irport outies (as a percent of the prisoluct tramaction vilu). messed on "vamaction walue" or the price actusly pud for the gopen in the cbintery at eaport. For putpoues of this caie the "proctuct purthase price" mouls tae the abpraprase fos traraictien viluation dof Cobirg thits, Compretaors, and Complested Windge A . unht. For euample, in the cane of the sarpleted mindow Nt Unit it woild be the fotal cout at the plant indualing the puats, laber, and decan tranepertatian coste. tugalEuroptimcotrmantyUnibedstatesasttatst Soon Therutos, Dearme, Chris, and one of the tmpers iram the corperyate lecal atalimet in Deanne ksested that "iryone whe an iQ of three conld see than the obwious solifion moult be ta atiemble the aindow Ak units in fel Avit ance lasor ratim there are lower." the IS.5, and the EC. frarice't tarmith in the ahalyoh, mortt met and we wil meet tomemsew at 9 a m. tharp to dicuss your findings