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Total landed cost: Vietnam or Mexico?
The prompt
A US retailer buys 100,000 garden chairs a year and compares two factories. Vietnam: factory price USD 10.00, sea freight USD 0.80 per chair, import duty assumed at 10 percent of the factory price, and 75 days of stock in transit and in safety stock. Mexico: factory price USD 11.50, truck freight USD 0.40, duty assumed at zero, and 15 days of stock. Holding stock costs about USD 0.01 per chair per day. Which source has the lower total landed cost?
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