The text below describes a scenario in which your company is building an automotive electronics component for a vehicle manufactured in the United States. Your customer is a major automotive OEM. Your job is to compare costs from three potential manufacturing locations: China, Mexico, and the United States
Data for each region are given below.

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Parameter China Мexico USA Comment Annual Volume 500,000 250 production days /year Term of Contract 4 years Number of passive 100 components BOM Cost of Passive $2.00 $2.08 $2.10 Components Placement cost per passive component Failure rate, passive components $0.005 $0.0055 $0.0055 0.15% 0.1% 0.1% Failure rate of a single component placement Number of ICs BOM Cost of ICs Total pin count, ICs Placement Cost, per pin IC soldering failure rate per pin 12 $7.20 $7.30 250 pins $7.30 $0.02 $0.022 0.05% $0.022 Direct Labor per part Direct Labor Cost Indirect Labor per part Indirect Labor Cost Incoming Quality Supplier Development 6 minutes $10/hour 4 minutes $15/hour 1.5 minutes 1 minute $30/hour 3 minutes 1.5 minutes $15/hour $0.20 $100,000 $50/hour $0.05 $40,000 $20/hour Cost per part $0.10 $75,000 Annual Cost Shipping Cost Shipping Method Shipping Time Alternative Shipping Cost $0.05/part Ocean/Rail Truck Truck 1 day N/A 8 weeks 1 week $0.50/part N/A (Air) Parameter China Мexico USA Comment Annual Volume 500,000 250 production days /year Term of Contract 4 years Number of passive 100 components BOM Cost of Passive $2.00 $2.08 $2.10 Components Placement cost per passive component Failure rate, passive components $0.005 $0.0055 $0.0055 0.15% 0.1% 0.1% Failure rate of a single component placement Number of ICs BOM Cost of ICs Total pin count, ICs Placement Cost, per pin IC soldering failure rate per pin 12 $7.20 $7.30 250 pins $7.30 $0.02 $0.022 0.05% $0.022 Direct Labor per part Direct Labor Cost Indirect Labor per part Indirect Labor Cost Incoming Quality Supplier Development 6 minutes $10/hour 4 minutes $15/hour 1.5 minutes 1 minute $30/hour 3 minutes 1.5 minutes $15/hour $0.20 $100,000 $50/hour $0.05 $40,000 $20/hour Cost per part $0.10 $75,000 Annual Cost Shipping Cost Shipping Method Shipping Time Alternative Shipping Cost $0.05/part Ocean/Rail Truck Truck 1 day N/A 8 weeks 1 week $0.50/part N/A (Air)