The text below describes a scenario in which your company is building an automot

Question

The text below describes a scenario in which your company is building an automotive electronics
component for a vehicle manufactured in the United States. Your customer is a major automotive OEM.
Your job is to compare costs from three potential manufacturing locations: China, Mexico, and the
United States
Data for each region are given below.

China Mexico 500,000 4 years Parameter USA Comment 250 production days/ year Annual Volume Term of Contract Number of passive components BOM Cost of Passive Components Placement cost per passive component Failure rate, passive components 100 $2.00 $0.005 0.15% $2.08 $0.0055 0.1% $2.10 $0.0055 0.1% Failure rate of a single component placement Number of ICs BOM Cost of ICs Total pin count, IC:s Placement Cost, per pin IC soldering failure rate per pin 12 $7.30 250 pins S0.022 0.05% $7.20 $7.30 $0.02 $0.022 Direct Labor per part Direct Labor Cost Indirect Labor per part Indirect Labor Cost Incoming Quality Supplier Development $100,000$75,000 6 minutes 4 minutes $10/hour $15/hour$30/hour 3 minutes 1.5 minutes 1.5 minutes $15/hour $20/hour$50/hour $0.10 1 minute $0.20 $0.05 Cost per part $40,000 Annual Cost $0.05/part Shipping Cost Shipping Method Shipping Time Alternative Shipping Cost Truck 1 day N/A Ocean/Ra Truck 8 weeks $0.50/part (Air) 1 week N/A

Explanation / Answer

Fifty a long time of advancements in drive, security, and rider conveniences have made a difference car deals develop by an normal yearly rate of 3 percent since 1964. This is generally twofold the rate of worldwide populace development over the same period and makes for a planet with over one billion vehicles on its roads.3 For the past 20 a long time, in spite of the fact that, deals in North America, Europe, and Japan have been generally level. Development has come from developing markets—much of it in China, which over the past decade has seen auto deals nearly triple, from marginally less than 8.5 million cars and trucks sold in 2004 to, gauges recommend, around 25 million in 2014. IHS Car predicts that more than 30 million vehicles a year will be sold in China by 2020, up from about 22 million in 2013.

China’s guarantee has pulled in more players to the nation, so edges will normally compress. However the country’s significance rises above these short-term comes about. In the decades ahead, China’s development as a prevailing advertise and generation center ought to have major suggestions for how cars are outlined. Chinese tastes and benchmarks, especially at the extravagance conclusion, where automakers are eminently raising the bar, will have a worldwide influence. China’s development as the world’s biggest car showcase too is fueling a burgeoning residential auto industry to compete nearby more built up worldwide players. For decades, Japanese, North American, and European OEMs shaped a group of three that, at its tallness, delivered an overpowering lion's share of the world’s automobiles (Show 1). South Korea has since taken its put among the car pioneers, capturing over 10 percent of the world advertise in the past 15 a long time. The development of Chinese players is changing the equation—and things are moving quick. Ten a long time prior, as it were one Chinese OEM, Shanghai Car Industry Enterprise, made the Fortune Worldwide 500. The 2014 list has six Chinese automakers.4 Given surging nearby request, the Chinese may fair be getting begun.

While South Korean OEMs Hyundai and Kia have made brands with worldwide reach, China’s OEMs do not however send out automobiles in a critical way. With solid neighborhood request as a base, a number of Chinese automakers will likely solidify, ended up superior able to serve their household advertise, and at that point look for to accomplish an universal affect, maybe through joint wanders, organizations, or other combinations with worldwide companies.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.