Interviewer view · keep this screen to yourself
Standard: Move production from Malaysia to Vietnam?
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
A Malaysian electronics contract manufacturer is considering moving production to Vietnam. The exhibit compares cost per unit. Should it move, and how much?
Format note: Difficulty: Standard. Format: interviewer-led, with an exhibit. Industry: Industrials and supply chain. Region: Malaysia and Vietnam. Interview length: about 30 minutes. The company is fictional and all figures are illustrative.
2. Answers to clarifying questions
Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.
If asked: How many units and at what price?
Answer: About 5 million units a year, sold at about USD 35 each.
If asked: What does a move cost?
Answer: About USD 12 million one time to move everything, or USD 6 million to move 40 percent.
If asked: What do customers want?
Answer: The main customer, a US electronics brand, wants supply from more than one country.
If asked: Do US tariffs differ by country of origin?
Answer: They can, and they change often. For this case assume equal rates for goods from Malaysia and Vietnam (illustrative), but flag tariffs as a risk.
3. The hypothesis a strong candidate states
Listen for an early, testable guess like this one. It does not need to match word for word.
Labor is cheaper in Vietnam, but materials and logistics may cost more. My hypothesis is that the saving is small and shrinking, so moving part of the volume beats moving all of it.
4. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Saving per unit x units versus the cost of moving
- Cost per unit in each country
- Yearly saving and payback
- Key: How the saving changes over time
- Customer value of two-country supply
Exhibit 1
Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).
| Cost item | Malaysia | Vietnam |
|---|---|---|
| Labor | 4 | 2.5 |
| Materials | 20 | 20.5 |
| Logistics | 1 | 1.8 |
| Overhead | 3 | 2.7 |
So-what
Vietnam saves USD 1.50 on labor but gives most of it back on materials and logistics, leaving a saving of USD 0.50 per unit.
5. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Cost per unit in Malaysia
What a strong candidate does: Labor, materials, logistics, and overhead.
Malaysia (USD per unit): 4 + 20 + 1 + 3 = 28
Step 2: Cost per unit in Vietnam
What a strong candidate does: Cheaper labor and overhead, dearer materials and logistics.
Vietnam (USD per unit): 2.5 + 20.5 + 1.8 + 2.7 = 27.5
Step 3: Yearly saving
What a strong candidate does: 5 million units at USD 0.50 each.
Saving (USD a year): 5,000,000 × (28 - 27.5) = 2,500,000
Step 4: Payback of a full move
What a strong candidate does: USD 12 million one time.
Payback (years): 12,000,000 ÷ (5,000,000 × (28 - 27.5)) = 4.8
Step 5: Curveball: wages grow at different speeds
What a strong candidate does: Interviewer: "Wages are rising about 8 percent a year in Vietnam and 3 percent in Malaysia." Saving per unit after three years:
Saving per unit in year 3 (USD): 0.5 - ((4 - 2.5) - (4 × 1.03 × 1.03 × 1.03 - 2.5 × 1.08 × 1.08 × 1.08)) = 0.2216
Step 6: Partial move with a customer premium
What a strong candidate does: Interviewer: "The customer would pay 1 percent more on units made in a second country." Moving 40 percent of volume for USD 6 million, payback on the saving plus the premium is:
Payback of a 40 percent move (years): 6,000,000 ÷ (5,000,000 × 0.4 × 0.5 + 5,000,000 × 0.4 × 35 × 0.01) = 3.53
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Move about 40 percent of volume, not all of it. First, the full move saves only USD 0.50 per unit, a 4.8-year payback. Second, faster wage growth in Vietnam cuts that saving to about USD 0.22 per unit within three years, weakening the case for a full move. Third, a 40 percent move earns the saving plus a 1 percent premium for two-country supply, paying back in about 3.5 years while keeping the Malaysian plant and its skills. Revisit a larger move only if Vietnamese suppliers lower material costs.
Risks a strong answer names: Start-up quality problems in a new plant; The customer premium may not last; US tariff rates by country of origin can change and could favor either country.
Next steps: Agree the premium in the next customer contract; Find local suppliers in Vietnam to reduce material and logistics costs.
Strong versus weak
A strong answer
Compared full cost per unit, not just labor, tested wage growth, and used the customer's need for two-country supply to shape a partial move.
A weak answer
Saw that labor is 40 percent cheaper in Vietnam and recommended moving everything.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
Total
0 out of 25
Score all five criteria to see the band and the feedback template.