You are the purchasing manager for Primo Caf$$ Inc., a small$-$sized manufacturer of stylish coffee makers based in Grand Rapids. The company has three distinct coffee makers that it produces: The Bean Boiler, the Family Man, and the Caffissimo. The Family Man is Primo Caf$$s mid$-$market offering. For many years, Primo Caf$$ manufactured most of the Family Man in$-$house and only bought the glass pot and the electronics that control the on$/$off function and the timer. However, cost pressures and growing opportunities in international markets changed the company$$s strategy over time. Indeed, over $60\%$ of Family Man sales are now outside the US$,$ primarily in the growing urban markets of India, China, and Taiwan.

Today, all raw materials and component parts are sourced from a variety of suppliers around the globe. Final assembly has been subcontracted to ZCA Company in Vietnam. ZCA operates three manufacturing facilities in Phong Nam, Vietnam. The company was established two years ago as a fully owned subsidiary of a global investment group, PrivoCo Finance Limited. ZCA has a good reputation for producing quality consumer products and has completed contracts with major brands such as Bosch, Kitchen Aid, Maytag, and Amana.

Since outsourcing to ZCA, the total cost to manufacture the Family Man has dropped from $$32$ per unit to $$12$ per unit. A total cost analysis for the Family Man is provided below. Each unit is sold for $$34\mathrm{.}99.$ The Family Man$$s sleek, artistic design and range of unique colors helps to distinguish it from a wide selection of similar products offered by competitors. Prices for direct competitors range from $$25$ to $$45.$ Sales of the Family Man range from $19,400$ to $20,600$ units per month.

After manufacturing the Family Man, ZCA will ship the monthly volume to Primo Caf$$s warehouse in Grand Rapids, Michigan. Primo Caf$$ will inspect each Family Man and ship the product to their retail partners in the U$.$S$.,$ India, China and Taiwan. See the table on the next page for the cost of these supply chains.