Total Landed Cost Comparison for Domestic and Foreign Suppliers
What is the total landed cost for the domestic supplier?
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What is the total landed cost for foreign supplier 1?
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What is the total landed cost for foreign supplier 2?
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Suppose actual demand is only 90% of expected demand. What would be the total landed cost of the Domestic Supplier?
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At what volume of monthly demand would the total cost be the same for the domestic supplier and foreign supplier 1?
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The total landed cost for the domestic supplier is $42,705, for foreign supplier 1 it is $45,250, and for foreign supplier 2 it is $45,275. If the actual demand is 90% of expected demand, the total landed cost of the Domestic Supplier would be $38,435. At a monthly demand of 6,975 units, the total cost would be the same for the domestic supplier and foreign supplier 1.
Understanding Total Landed Cost Comparison
When comparing the total landed cost of the suppliers, it is essential to consider all costs involved, such as the price per unit, packaging costs, international shipping, and inland freight. Each of these factors contributes to the overall cost of sourcing the product.
By carefully evaluating and comparing these costs, businesses can determine which supplier offers the most cost-effective solution for their needs. It is crucial to take into account both the expected demand and the actual demand, as changes in demand can impact the total cost of sourcing the product.
Ultimately, by analyzing all these variables, businesses can make an informed decision when selecting a supplier for their product. It is important to weigh all the factors and data to ensure a successful and cost-efficient sourcing process.