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Total landed cost: Vietnam or Mexico?

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

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

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?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. 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.

Total landed cost = price + freight + duty + inventory holding
- Vietnam
- Mexico
- Key: Difference per chair and per year

Exhibit 1

Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).

Total landed cost per chair, illustrative (USD)(USD per chair)

Total landed cost per chair, illustrative (USD)
Cost item	Factory in Vietnam	Factory in Mexico
Factory price	10	11.5
Freight	0.8	0.4
Import duty (assumed rates)	1	0
Inventory holding cost	0.75	0.15
Total landed cost	12.55	12.05

So-what

The cheaper factory is not the cheaper source once freight, duty and inventory are added.

4. 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: Vietnam duty
What a strong candidate does: 10 percent of USD 10.00.
Vietnam duty per chair (USD): 10 × 0.1 = 1
Step 2: Vietnam holding cost
What a strong candidate does: 75 days at USD 0.01 a day.
Vietnam holding cost per chair (USD): 75 × 0.01 = 0.75
Step 3: Vietnam total
What a strong candidate does: Price, freight, duty and holding.
Vietnam landed cost (USD): 10 + 0.8 + 1 + 0.75 = 12.55
Step 4: Mexico holding cost
What a strong candidate does: 15 days at USD 0.01 a day.
Mexico holding cost per chair (USD): 15 × 0.01 = 0.15
Step 5: Mexico total
What a strong candidate does: Price, freight, no duty, and holding.
Mexico landed cost (USD): 11.5 + 0.4 + 0 + 0.15 = 12.05
Step 6: Saving per year
What a strong candidate does: The difference per chair times 100,000 chairs.
Annual saving from Mexico (USD): (12.55 - 12.05) × 100,000 = 50,000

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The retailer should source from Mexico, because its landed cost is about USD 12.05 per chair against USD 12.55 from Vietnam, a saving of USD 50,000 a year even though its factory price is 15 percent higher. First, Mexico avoids the assumed 10 percent duty, worth USD 1 a chair. Second, 15 days of stock instead of 75 cuts holding cost from USD 0.75 to USD 0.15 and lowers the chance of holding the wrong stock. The main risk is that tariff rates change quickly. As a next step, confirm current tariffs and the Mexican factory's quality and capacity.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.