This document analyzes the total cost of ownership for Payson Electronics to source specialized electronic components from suppliers in China, Mexico, or the US. It finds that sourcing from China results in the lowest per unit and total costs. Specifically, sourcing Tool A from China costs $3,448 per unit and $3.6 million total for US shipments, which is lower than the costs from Mexico or the US. Similarly, sourcing from China to Brazil has the lowest total cost of $2 million. Based on the cost analysis and risk assessment, the document recommends sourcing from China and choosing Tool A.
This document outlines 10 common mistakes organizations make when implementing IT asset management (ITAM) programs. The mistakes include: 1) Not aligning the ITAM program with executive goals and stakeholder needs. 2) Failing to document processes. 3) Not establishing metrics to measure effectiveness. 4) Having processes that are not standardized or flexible enough. 5) Failing to revise policies over time. 6) Not socializing policies across the organization. 7) Creating policies that only apply to end-users. 8) Confusing the asset repository with the configuration management database (CMDB). 9) Relying on discovery data from tools that are not fully deployed. 10) Failing to normalize data to reduce duplication. The document
November go list the best things to do with nj kids this monthEuro Art Studio
Euro Art Studio offers art classes for children and teens in a wide range of different mediums. They work with certified art teacher who is also an artist. Euro Art Studio offers Art classes for children and teens in a wide range of mediums and by a certified Art teacher as well as working artist. We locate & serve for teens between 4-17 throughout the New Jersey, USA.
Euro art studio best place to learn drawing and painting for the kids of new ...Euro Art Studio
Euro Art Studio offers art classes for children and teens in a wide range of different mediums. They work with certified art teacher who is also an artist. Euro Art Studio offers Art classes for children and teens in a wide range of mediums and by a certified Art teacher as well as working artist. We locate & serve for teens between 4-17 throughout the New Jersey, USA.
Este documento describe las partes principales de un computador. Explica que un computador está compuesto por hardware (partes físicas como la CPU, memoria y periféricos) y software (programas y datos). Detalla los principales dispositivos de entrada como el teclado, ratón, escáner y micrófono, y de salida como el monitor, bocinas y cámara web.
This dissertation by Aaron Alexander Jones examines the relationship between microbial community structure, function, and mineral surfaces in subsurface environments. Chapter 1 introduces the motivation and questions. Chapter 2 demonstrates that biofilm growth and microbial diversity are highly dependent on the type of mineral surface in nutrient-limited systems. Chapter 3 shows that mineral type controls up to 90% of phylogenetic diversity regardless of environmental conditions, indicating mineral selection is genetically ingrained. It also reveals shifts in community structure and function that impact geochemistry. Chapter 4 provides evidence that carbon isotope fractionation can be used to infer microbial community structure and function in sulfuric acid cave ecosystems.
This document provides tips for professionalism as a handyman, including listening to directions carefully, taking responsibility for one's work, showing respect to supervisors, staying open-minded to new methods, effectively managing time by completing jobs on time and doing more than the minimum, and giving credits to those who contributed.
Los celulares se han vuelto esenciales en el día a día ya que facilitan las rutinas y brindan funciones útiles como acceso a internet, música y más. La tienda online Sagafalabella ofrece una variedad de modelos, marcas y tamaños de celulares de última generación de Nokia, Lenovo, Samsung, Alcatel, LG, Sony, Bitel y Entel para satisfacer diferentes necesidades y preferencias.
Este documento describe el concepto de herencia en Java y proporciona un ejemplo guiado de cómo crear una clase derivada llamada BotonContador que herede de la clase JButton existente. La clase BotonContador añade métodos para contar el número de pulsaciones de un botón, como setPulsaciones(), getPulsaciones(), etc., mientras mantiene las características existentes de JButton. El documento explica cómo definir la clase BotonContador usando herencia, agregar propiedades y métodos, e implementar un programa de prueba para demo
This document outlines 10 common mistakes organizations make when implementing IT asset management (ITAM) programs. The mistakes include: 1) Not aligning the ITAM program with executive goals and stakeholder needs. 2) Failing to document processes. 3) Not establishing metrics to measure effectiveness. 4) Having processes that are not standardized or flexible enough. 5) Failing to revise policies over time. 6) Not socializing policies across the organization. 7) Creating policies that only apply to end-users. 8) Confusing the asset repository with the configuration management database (CMDB). 9) Relying on discovery data from tools that are not fully deployed. 10) Failing to normalize data to reduce duplication. The document
November go list the best things to do with nj kids this monthEuro Art Studio
Euro Art Studio offers art classes for children and teens in a wide range of different mediums. They work with certified art teacher who is also an artist. Euro Art Studio offers Art classes for children and teens in a wide range of mediums and by a certified Art teacher as well as working artist. We locate & serve for teens between 4-17 throughout the New Jersey, USA.
Euro art studio best place to learn drawing and painting for the kids of new ...Euro Art Studio
Euro Art Studio offers art classes for children and teens in a wide range of different mediums. They work with certified art teacher who is also an artist. Euro Art Studio offers Art classes for children and teens in a wide range of mediums and by a certified Art teacher as well as working artist. We locate & serve for teens between 4-17 throughout the New Jersey, USA.
Este documento describe las partes principales de un computador. Explica que un computador está compuesto por hardware (partes físicas como la CPU, memoria y periféricos) y software (programas y datos). Detalla los principales dispositivos de entrada como el teclado, ratón, escáner y micrófono, y de salida como el monitor, bocinas y cámara web.
This dissertation by Aaron Alexander Jones examines the relationship between microbial community structure, function, and mineral surfaces in subsurface environments. Chapter 1 introduces the motivation and questions. Chapter 2 demonstrates that biofilm growth and microbial diversity are highly dependent on the type of mineral surface in nutrient-limited systems. Chapter 3 shows that mineral type controls up to 90% of phylogenetic diversity regardless of environmental conditions, indicating mineral selection is genetically ingrained. It also reveals shifts in community structure and function that impact geochemistry. Chapter 4 provides evidence that carbon isotope fractionation can be used to infer microbial community structure and function in sulfuric acid cave ecosystems.
This document provides tips for professionalism as a handyman, including listening to directions carefully, taking responsibility for one's work, showing respect to supervisors, staying open-minded to new methods, effectively managing time by completing jobs on time and doing more than the minimum, and giving credits to those who contributed.
Los celulares se han vuelto esenciales en el día a día ya que facilitan las rutinas y brindan funciones útiles como acceso a internet, música y más. La tienda online Sagafalabella ofrece una variedad de modelos, marcas y tamaños de celulares de última generación de Nokia, Lenovo, Samsung, Alcatel, LG, Sony, Bitel y Entel para satisfacer diferentes necesidades y preferencias.
Este documento describe el concepto de herencia en Java y proporciona un ejemplo guiado de cómo crear una clase derivada llamada BotonContador que herede de la clase JButton existente. La clase BotonContador añade métodos para contar el número de pulsaciones de un botón, como setPulsaciones(), getPulsaciones(), etc., mientras mantiene las características existentes de JButton. El documento explica cómo definir la clase BotonContador usando herencia, agregar propiedades y métodos, e implementar un programa de prueba para demo
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
Profiting from Great Cross-Channel Customer Experiences_Final Draft 2Patty Lehan
The document discusses how customers now interact with businesses through many different channels and how their experiences are often disconnected. This frustrates customers and leads to lost revenue and decreased loyalty. It recommends developing a superior customer experience strategy by taking the customer's perspective. Oracle offers solutions like Siebel CRM and ATG Commerce that can help integrate systems and provide personalized, consistent experiences across all channels.
This document contains a personal summary and resume for Om Prakash Sahoo. It outlines his SAP and HR experience including certifications in SAP HCM and skills in areas like personnel administration, organization management, time management, and payroll. It also lists his academic credentials and two previous jobs in HR and SAP consulting. His objective is to obtain a job utilizing his 2.7 years of SAP HCM and HR experience.
El documento proporciona información sobre virus informáticos, incluyendo su definición, cómo se transmiten y propagan, características comunes de los virus, y un breve resumen histórico sobre el origen y evolución de los virus desde la década de 1940 hasta la actualidad.
This document summarizes a court case regarding whether wealthy nations have an obligation to help alleviate poverty in other countries. The court considers arguments from two petitioners, Peter Singer and Thomas Nagel. While acknowledging Nagel's argument is stronger, the court ultimately rules against both petitioners. It finds that obligations can only exist between parties that consented to an agreement, and one cannot force aid without consent. Additionally, the solutions proposed by both petitioners fail the criterion of practicality, as they would require drastic changes that could increase injustice and harm innocent people. The court concludes wealthy nations have no enforceable obligation to help poor foreign nations.
Sanjeet Kumar Singh is seeking a management role in supply chain, logistics, or materials management with an oil, petroleum, power, or steel company. He has 12 years of experience in materials and logistics, including expertise in stores and warehouse management. His career includes roles managing materials and inventory for several power plant construction projects. He is proficient in ERP systems like SAP MM and has a Master's degree in Materials Management.
The document discusses the benefits of meditation for reducing stress and anxiety. Regular meditation practice can help calm the mind and body by lowering heart rate and blood pressure. Studies have shown that meditating for just 10-20 minutes per day can have significant positive impacts on both mental and physical health over time.
Trends in Nearshore and Offshore ManufacturingEntrada Group
This Entrada Group (www.entradagroup.com) presentation explains why and how Mexico is becoming a key manufacturing destination for the world’s aerospace industry.
This document summarizes the costs associated with ineffective business continuity programs. It finds that IT/telecommunications outages can cost organizations millions, with minor incidents costing on average $53,210 per minute of downtime. Data breaches and cyber attacks were found to cost on average $11.6 million annually according to one study. Adverse weather events in the US alone resulted in $12.8 billion in insurance payouts in 2013 according to one report. The document concludes by recommending that organizations strengthen their business continuity programs to reduce costs from disruptions.
The document discusses the private costs and net present value of building a landfill gas collection and energy generation system at the West Lake Landfill. It analyzes 13 potential systems using internal combustion engines, gas turbines, or steam turbines. Sensitivity analysis shows that electricity price, discount rate, tax credits, and loan rate most impact net present value. The recommended system is a typical internal combustion system with 3 engines, as it yields the highest net present value of $8.53 million. Sensitivity analysis indicates this recommendation could change for electricity prices below $0.028/kWh or loan rates above 16.6%. Tax credits are also highly influential on the project's profitability.
The Economic Benefits of Reshoring to MexicoNovaLink
Reshoring to Mexico is more than a logistical move; it's a strategic step toward economic success. Business aiming to thrive in a dynamic global environment will find Mexico an attractive destination because of its cost efficiency, proximity to markets, skilled workforce, and government support.
Optimal Decisions Between Closure & Partial Production During a COVID-19 Quar...Etor007
The document discusses using real options analysis to determine whether an automotive assembly plant in Mexico should continue partial production or close during the COVID-19 pandemic. Key factors like expected vehicle demand, production costs, and wages are considered under each scenario. The analysis finds it is optimal to continue production if the free cash flow exceeds $6.844 million, as closing would otherwise have a higher present value. Three strategic parameters that could change this decision are also identified: vehicle demand reduction, tax incentives, and capital costs.
More companies have moved their supply chains back into U.S. borders due to low returns and the overwhelming complexity of offshore operations. When a company decides to offshore its supply chain, it is relatively easy to assess direct costs, which are typically 15-17% of product cost. But companies are often caught off guard by hidden costs, which typically add 5-7% to product cost.
Moving a supply chain abroad complicates a company’s ability to manage its supply chain dynamically and increases risks, such as intellectual property theft, under-performance by a vendor, or a disparity between what is negotiated and delivered.
While a significant amount of literature dedicates itself to helping companies manage offshore operations, solutions are often vague and esoteric, and certainly do not guarantee cost savings or quality improvement. This paper examines five key areas of hidden cost driving many companies to conclude that modern, efficient manufacturing and supply chain management are best conducted near the point of use.
For more whitepapers and articles on PCBA design and manufacturing, visit http://blog.optimumdesign.com/
BNamericas Project Risk Analytics - June 2015 Inaugural reportnatans
The document summarizes the findings of a report analyzing cost overruns and delays in the top 100 infrastructure projects in Latin America with a total original cost estimate of $242 billion. It finds that the projects have collectively experienced cost increases of over $133 billion (51% overrun) and delays in 58% of the projects. The largest cost overruns and delays have occurred in large, complex projects like refineries and hydroelectric dams. Later stage projects have seen greater increases to cost estimates, calling into question the traditional view that uncertainty decreases as projects progress. Financial management issues were the most commonly cited factor for cost increases.
This document describes a project to develop a pricing tool for general liability insurance. A team of actuarial consultants was hired to create the tool for an insurance company launching a new tri-state product for small businesses. The tool calculates premiums through three main steps: 1) determining a manual premium based on limits, deductibles and expenses, 2) calculating an experience modifier based on 3 years of loss data, and 3) combining these factors to produce a final indicated premium. The tool was designed to be accurate, convenient and flexible for underwriters through functions like quick searching of class codes, reasonability testing of inputs, and easy resetting of data entries.
The AutoCon 0 day two (Tuesday, 14 Nov) keynote speaker was an engineer who's been talking about "the self driving network" for at least a decade already. Kireeti Kompella is the CTO, PSD at Juniper Networks. Before taking on his current role, he served as CTO, SDN at Juniper Networks. Previously, Kompella was CTO at Contrail Systems, which was acquired by Juniper in December 2012. Prior to joining Contrail, he was CTO and Chief Architect, Junos at Juniper Networks.
Kompella has deep experience in Packet Transport, large-scale MPLS, VPNs, VPLS, and Layer 1 to Layer 3 networking, and has been active in the IETF, as former chair of the CCAMP Working Group and as author of several Internet Drafts and RFCs (in the CCAMP, IS-IS, L2VPN, MPLS, NVO3, OSPF, and TE WGs). Prior to joining Juniper in 1997, he worked on file systems at NetApp, SGI, and ACSC (acquired by Veritas). At heart, Kompella is still an engineer and a coder, and loves talking to ASIC folks.
Kompella received a bachelor of science degree in electrical engineering and a master’s degree in computer science from IIT, Kanpur, and a PhD in computer science from University of Southern California, specializing in number theory and cryptography. He holds 46 issued patents.
American Science and Engineering (ASEI) produces x-ray screening systems for cargo, vehicles, and facilities used for homeland security against drug trafficking and terrorism. Their main products are Z Backscatter imaging systems. Revenue increased in 2008 from sales of Z Backscatter systems to the US and foreign governments. However, profit margins decreased due to higher technology costs and competitive pressures. ASEI aims to continue international expansion and grow their markets in seaports, borders, and corporate security.
Navigating Interconnecion and Transmission in the Major US Marketsbrokish
This document summarizes a presentation given at the European Wind Energy Conference on navigating interconnection and transmission processes in major US electricity markets. It provides an overview of key transmission policy issues, the Federal Energy Regulatory Commission's generator interconnection process, and the specific interconnection procedures and challenges in regional markets operated by MISO, SPP, CAISO, PJM, and ERCOT. It stresses the importance of participating in regional stakeholder processes as rules frequently change. It also lists various industry organizations that advocate for wind energy development at the regional level.
This document summarizes a presentation given at the European Wind Energy Conference on navigating interconnection and transmission processes in major US electricity markets. It provides an overview of key transmission policy issues, the Federal Energy Regulatory Commission's generator interconnection process, and regional interconnection processes in MISO, SPP, CAISO, PJM, and ERCOT. It also discusses challenges such as queue clogging and the importance of industry organizations in responding to barriers to wind energy development.
These slides report on the loop flows in the PJM/MISO footprint
It reports that loop flows are not benign, i.e. they pose a challenge to electric power reliability and higher balancing costs are incurred even when the threat to reliability is small.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
Profiting from Great Cross-Channel Customer Experiences_Final Draft 2Patty Lehan
The document discusses how customers now interact with businesses through many different channels and how their experiences are often disconnected. This frustrates customers and leads to lost revenue and decreased loyalty. It recommends developing a superior customer experience strategy by taking the customer's perspective. Oracle offers solutions like Siebel CRM and ATG Commerce that can help integrate systems and provide personalized, consistent experiences across all channels.
This document contains a personal summary and resume for Om Prakash Sahoo. It outlines his SAP and HR experience including certifications in SAP HCM and skills in areas like personnel administration, organization management, time management, and payroll. It also lists his academic credentials and two previous jobs in HR and SAP consulting. His objective is to obtain a job utilizing his 2.7 years of SAP HCM and HR experience.
El documento proporciona información sobre virus informáticos, incluyendo su definición, cómo se transmiten y propagan, características comunes de los virus, y un breve resumen histórico sobre el origen y evolución de los virus desde la década de 1940 hasta la actualidad.
This document summarizes a court case regarding whether wealthy nations have an obligation to help alleviate poverty in other countries. The court considers arguments from two petitioners, Peter Singer and Thomas Nagel. While acknowledging Nagel's argument is stronger, the court ultimately rules against both petitioners. It finds that obligations can only exist between parties that consented to an agreement, and one cannot force aid without consent. Additionally, the solutions proposed by both petitioners fail the criterion of practicality, as they would require drastic changes that could increase injustice and harm innocent people. The court concludes wealthy nations have no enforceable obligation to help poor foreign nations.
Sanjeet Kumar Singh is seeking a management role in supply chain, logistics, or materials management with an oil, petroleum, power, or steel company. He has 12 years of experience in materials and logistics, including expertise in stores and warehouse management. His career includes roles managing materials and inventory for several power plant construction projects. He is proficient in ERP systems like SAP MM and has a Master's degree in Materials Management.
The document discusses the benefits of meditation for reducing stress and anxiety. Regular meditation practice can help calm the mind and body by lowering heart rate and blood pressure. Studies have shown that meditating for just 10-20 minutes per day can have significant positive impacts on both mental and physical health over time.
Trends in Nearshore and Offshore ManufacturingEntrada Group
This Entrada Group (www.entradagroup.com) presentation explains why and how Mexico is becoming a key manufacturing destination for the world’s aerospace industry.
This document summarizes the costs associated with ineffective business continuity programs. It finds that IT/telecommunications outages can cost organizations millions, with minor incidents costing on average $53,210 per minute of downtime. Data breaches and cyber attacks were found to cost on average $11.6 million annually according to one study. Adverse weather events in the US alone resulted in $12.8 billion in insurance payouts in 2013 according to one report. The document concludes by recommending that organizations strengthen their business continuity programs to reduce costs from disruptions.
The document discusses the private costs and net present value of building a landfill gas collection and energy generation system at the West Lake Landfill. It analyzes 13 potential systems using internal combustion engines, gas turbines, or steam turbines. Sensitivity analysis shows that electricity price, discount rate, tax credits, and loan rate most impact net present value. The recommended system is a typical internal combustion system with 3 engines, as it yields the highest net present value of $8.53 million. Sensitivity analysis indicates this recommendation could change for electricity prices below $0.028/kWh or loan rates above 16.6%. Tax credits are also highly influential on the project's profitability.
The Economic Benefits of Reshoring to MexicoNovaLink
Reshoring to Mexico is more than a logistical move; it's a strategic step toward economic success. Business aiming to thrive in a dynamic global environment will find Mexico an attractive destination because of its cost efficiency, proximity to markets, skilled workforce, and government support.
Optimal Decisions Between Closure & Partial Production During a COVID-19 Quar...Etor007
The document discusses using real options analysis to determine whether an automotive assembly plant in Mexico should continue partial production or close during the COVID-19 pandemic. Key factors like expected vehicle demand, production costs, and wages are considered under each scenario. The analysis finds it is optimal to continue production if the free cash flow exceeds $6.844 million, as closing would otherwise have a higher present value. Three strategic parameters that could change this decision are also identified: vehicle demand reduction, tax incentives, and capital costs.
More companies have moved their supply chains back into U.S. borders due to low returns and the overwhelming complexity of offshore operations. When a company decides to offshore its supply chain, it is relatively easy to assess direct costs, which are typically 15-17% of product cost. But companies are often caught off guard by hidden costs, which typically add 5-7% to product cost.
Moving a supply chain abroad complicates a company’s ability to manage its supply chain dynamically and increases risks, such as intellectual property theft, under-performance by a vendor, or a disparity between what is negotiated and delivered.
While a significant amount of literature dedicates itself to helping companies manage offshore operations, solutions are often vague and esoteric, and certainly do not guarantee cost savings or quality improvement. This paper examines five key areas of hidden cost driving many companies to conclude that modern, efficient manufacturing and supply chain management are best conducted near the point of use.
For more whitepapers and articles on PCBA design and manufacturing, visit http://blog.optimumdesign.com/
BNamericas Project Risk Analytics - June 2015 Inaugural reportnatans
The document summarizes the findings of a report analyzing cost overruns and delays in the top 100 infrastructure projects in Latin America with a total original cost estimate of $242 billion. It finds that the projects have collectively experienced cost increases of over $133 billion (51% overrun) and delays in 58% of the projects. The largest cost overruns and delays have occurred in large, complex projects like refineries and hydroelectric dams. Later stage projects have seen greater increases to cost estimates, calling into question the traditional view that uncertainty decreases as projects progress. Financial management issues were the most commonly cited factor for cost increases.
This document describes a project to develop a pricing tool for general liability insurance. A team of actuarial consultants was hired to create the tool for an insurance company launching a new tri-state product for small businesses. The tool calculates premiums through three main steps: 1) determining a manual premium based on limits, deductibles and expenses, 2) calculating an experience modifier based on 3 years of loss data, and 3) combining these factors to produce a final indicated premium. The tool was designed to be accurate, convenient and flexible for underwriters through functions like quick searching of class codes, reasonability testing of inputs, and easy resetting of data entries.
The AutoCon 0 day two (Tuesday, 14 Nov) keynote speaker was an engineer who's been talking about "the self driving network" for at least a decade already. Kireeti Kompella is the CTO, PSD at Juniper Networks. Before taking on his current role, he served as CTO, SDN at Juniper Networks. Previously, Kompella was CTO at Contrail Systems, which was acquired by Juniper in December 2012. Prior to joining Contrail, he was CTO and Chief Architect, Junos at Juniper Networks.
Kompella has deep experience in Packet Transport, large-scale MPLS, VPNs, VPLS, and Layer 1 to Layer 3 networking, and has been active in the IETF, as former chair of the CCAMP Working Group and as author of several Internet Drafts and RFCs (in the CCAMP, IS-IS, L2VPN, MPLS, NVO3, OSPF, and TE WGs). Prior to joining Juniper in 1997, he worked on file systems at NetApp, SGI, and ACSC (acquired by Veritas). At heart, Kompella is still an engineer and a coder, and loves talking to ASIC folks.
Kompella received a bachelor of science degree in electrical engineering and a master’s degree in computer science from IIT, Kanpur, and a PhD in computer science from University of Southern California, specializing in number theory and cryptography. He holds 46 issued patents.
American Science and Engineering (ASEI) produces x-ray screening systems for cargo, vehicles, and facilities used for homeland security against drug trafficking and terrorism. Their main products are Z Backscatter imaging systems. Revenue increased in 2008 from sales of Z Backscatter systems to the US and foreign governments. However, profit margins decreased due to higher technology costs and competitive pressures. ASEI aims to continue international expansion and grow their markets in seaports, borders, and corporate security.
Navigating Interconnecion and Transmission in the Major US Marketsbrokish
This document summarizes a presentation given at the European Wind Energy Conference on navigating interconnection and transmission processes in major US electricity markets. It provides an overview of key transmission policy issues, the Federal Energy Regulatory Commission's generator interconnection process, and the specific interconnection procedures and challenges in regional markets operated by MISO, SPP, CAISO, PJM, and ERCOT. It stresses the importance of participating in regional stakeholder processes as rules frequently change. It also lists various industry organizations that advocate for wind energy development at the regional level.
This document summarizes a presentation given at the European Wind Energy Conference on navigating interconnection and transmission processes in major US electricity markets. It provides an overview of key transmission policy issues, the Federal Energy Regulatory Commission's generator interconnection process, and regional interconnection processes in MISO, SPP, CAISO, PJM, and ERCOT. It also discusses challenges such as queue clogging and the importance of industry organizations in responding to barriers to wind energy development.
These slides report on the loop flows in the PJM/MISO footprint
It reports that loop flows are not benign, i.e. they pose a challenge to electric power reliability and higher balancing costs are incurred even when the threat to reliability is small.
Uncertainty on Cross-Border Supply Chains by Gaston CedilloGaston Cedillo
The document analyzes uncertainty in crossing times at the US-Mexico border and its impacts on safety stocks in NAFTA supply chains. It finds that variability in border crossing times due to differences in processes and infrastructure between the two countries increases costs for businesses. Modeling six scenarios around participation in C-TPAT and FAST programs, the research estimates that safety stocks would need to increase by 72% on average to prevent disruptions from border crossing time uncertainty. The study calls for collaborative border inspections and a NAFTA information system to reduce variability and its effects on supply chains.
Economy & Internet Trends - Morgan Stanley PresentationSubrahmanyam KVJ
The document discusses trends in the mobile internet, noting that mobile internet usage is larger than most estimates and will continue growing rapidly due to devices like the iPhone. It also explores how next generation platforms combining social networking and mobile are driving changes in communication and commerce. Finally, it examines how 3G adoption and trends vary by geography and the challenges carriers face with surging network demand.
Digital Assets in United States: All you need to know before the US regulatio...BlockZero
Still a work in progress, the U.S. Framework for digital assets takes another step forward these last weeks! And all you need to know about it is below in our new Thought Leadership signed by Marie-Chantal Leduc, Sabrina McNeil and Rodrigo Urcuyo
BNamericas Project Risk Analytics - October 2015 State vs Privatenatans
The document summarizes the results of tracking 200 major infrastructure projects in Latin America. It finds that total estimated costs have increased by 38% ($141 billion) from original estimates. 47% of projects have experienced delays, with the average delay being 15.9 months (35% longer than estimated). 37.5% of projects have had increased cost estimates, with the average project now 37.6% over budget. State-owned projects have had lower percentage cost overruns than private projects, but represent the majority of the total $141 billion in increased costs. Projects that have gone over budget have seen much larger average increases, with delays averaging 67% and costs averaging 104% over original estimates.
Estimation of Beta values of Indian power generation projectsPremier Publishers
This document discusses the development of a fuzzy logic-based tool for assessing systematic risk in Indian power generation projects. It aims to estimate "Beta" values, a measure of a project's volatility relative to the market, by analyzing various financial factors like debt-equity ratio, profit margins, sales growth, and more. The tool incorporates both quantitative data and qualitative assessments from experts to provide a flexible means of systematic risk analysis. The document reviews previous literature establishing links between accounting/financial indicators and systematic risk. It then proposes a model to estimate Beta values based on a project's estimated systematic risk factor and various financial metrics.
Week 3 General Electric ReportChad Uhler, Chaka Birde.docxcockekeshia
Week 3: General Electric Report
Chad Uhler, Chaka Birdette, Sharitza Bailey, Amy Piper
ACC/491
June 26, 2017
Alisa Dumond
1
12
Week 3 Scenario Assignments
Table of Contents
Section 1
Introduction…………………………………………………page 3
Initial Risk assessment……………………………………...page 3-5
Section 2
Analytical Procedures………………………………………page 5-6
Analysis of Ratios…………………………………………..page 6-7
Section 3
Materiality………………………………………………….page 7-8
Misstatement……………………………………………….page 8
Audit Risks…………………………………………………page 8
Audit Risk Model…………………………………………..page 8
Inherent Risks………………………………………………page 9
Relationship of Risk to Audit Evidence……………………page 9
Section 4
Five Types of Tests…………………………………………page 9-10
Test of Controls……………………………………………..page 10
Substantive Tests……………………………………………page 10
Analytical Procedures……………………………………….page 10
Test of Details of Balances………………………………….page 10-11
Conclusion…………………………………………………. page 11
Reference Page……………………………………………...page 12
Section 1
Introduction
General Electric has very aggressive competition through changing technology where they continue to do researching and development. They are affected by world economies and the instability in commodity prices, price of oil, and foreign currency volatility. Some factors that may affect General Electric’s business is the quality and efficiency in the product development department, research and development expenditures, and the regulatory standards of their products (United States Securities and Exchange Commission, 2016). Do to the size and global market of General Electric, it could take them at least three months to do a proper audit. One month for planning, one month for fieldwork, and one month for the audit report.
Initial Risk Assessment
General Electric is a global company operating in over eight different segments including: power, renewable energy, oil & gas, aviation, healthcare, transportation, energy/connections & lighting, and capital. With this diverse business platform comes numerous risks, consisting of both firm-specific and macro-level risks. As GE CEO, Jeffrey Immelt, points out, the most notable risk factors lie within product quality, cybersecurity, liquidity, global compliance and business integrations (SEC, 2016).
Product quality is the risk of product failure, safety and environmental issues, and risks stemming from operations surrounding the product’s development. It is crucial when conducting an audit of a product-focused firm to recognize all products and service lines, as well as the inherent risks that lie within the value chain of the products and services. Third-party vendors generally present additional risk on the front and back end of a product. It is pivotal to understand the value chain in its entirety in order to know when and where to gather audit evidence. It is also essential to know when there is new product introduction and how that affects the various revenue and expense items generated from th.
Week 3 General Electric ReportChad Uhler, Chaka Birde.docx
TCOFinalAnalysis
1. ASSESSING TOTAL COST OF OWNERSHIP
For Payson Electronics
Current USA supplier vs China supplier vs Mexico supplier
Tool A vs. Tool B
Submitted By:
Nainsi Jain
Xiaoman Wu
Victoria Yan
MorianBlack
2. INDEX
1. Executive Summary
2. Assumptions
3. Sensitivities Analysis
4. Risk Assessment
5. Crucial Parameters of Assessment
6. Exhibit 1: Process FlowDiagram with costs involved at each step
7. Exhibit 2: Packing Standards for the chips
8. Exhibit 3: Descriptionof Costs
9. Exhibit 4: Sources of cost data
10. Exhibit 5: Excelworksheets for TCO Analysis
11. Recommendation
3. EXECUTIVE SUMMARY
ISSUE
The purpose of this report is to analyze the total ownership cost of Payson Electronics
for sourcing specialized electronic components from China versus Mexico. Included in this
report is the definition of costs, the assumptions we made to derive the final costs, the
justification for our final choice, sensitivity analysis, risk assessment and recommendations.
APPROACH TO THE ANALYSIS
Our approach to the analysis was to first develop a process flow chart diagram including
the cost factors relevant to the decision. Then we determined which cost issues were pertinent
to include in our analysis. Once this was decided we considered the costs involved in each step
along the way. We then divided the costs of each tool based on each location involved. Once
we divided these up by tool and location, we tallied all the costs and came up with the individual
total costs.
FINDINGS
On a per unit basis we found that China had the advantage costing $3,448 for Tool A
versus $4072 and $5489 for Mexico and US respectively. This translated into China again
holding the edge in lowest overall total cost of ownership with total cost for shipments to US
totaling $3.6 million versus $4.3 million and $5.5 million for Mexico and US respectively.
Similarly, China edges out Mexico and US in total cost for shipments to Brazil. Total cost from
China to Brazil was $2 million compared to $2.4 million and $2.7 million for Mexico and US
respectively. Therefore, it was not difficult to choose China from a total cost financial standpoint.
RECOMMENDATION
Based on our analysis of short term and long term costs, sensitivity analysis, and risk
assessment, our recommendation is to source from China and choose Tool A for production.
The reason we decided to source from China was that China had the lowest total cost. The cost
factor that had the greatest influence on total cost was that China had the lowest labor cost. In
addition to having the lowest total cost, China also rated the best when we performed our risk
analysis. Finally, the results of the sensitivity analysis still favored China. Likewise, Tool A
turned out to be the more favorable option regardless of which location it was employed at.
4. ASSUMPTIONS
a) Both the assembly operations will order every month hence there will be total 12 orders
in the whole year placed respectively by both assembly locations.
b) The current supplier, which is the US supplier, is located in Kansas and close to the
Wichita assembly location.
c) Material cost listed in the table 1, is the cost per unit.
d) The short term costs viz. material costs, assembly costs (yearly maintenance), utilities,
consumables, labor costs, transportation costs remain the same over next 3 years.
e) Intangible
f) The chip category is Integrated Circuits (IC), multi-chip components. So the
Electronic Components is duty free when shipping from Mexico to The US.
g) Import duty -
❏ According to the NAFSTA from Mexico to USA is 0%.
❏ The import duty levied in Brazil is 16%.
❏ Since the electronic components is classified as NCM 8535.21.00 electrical
circuits (for example, switches, fuses, lightning arresters, voltage limiters, surge
suppressors, plugs, junction boxes), according to United States International
trade commission (see the reference), the import duty on electrical circuit levied
in the USA is 2.7%
h) In the case of China & Mexico supplier, it states FOB originator’s factory. FOB however
is defined as shipment must get custom cleared at the port of origin country. Since the
Incoterm is FOB term, we assume that the cost of the transportation from the supplier’s
plant to the airport and custom clearance at the port of origin country will be borne by
the suppliers.
i) We assume a standard packaging for the chips (see Exhibit 2)
5. SENSITIVITY ANALYSIS
For the sensitivities, we choose the cost component, the utilization rate, as well as the yield rate
of both tool A and tool B as the key sensitivities. We also want to find the component that would
affect the total cost of ownership most, so that the company can focus on these component to
reduce cost. For the Graph 1, it talks about the increased percentage if the cost component
increased by 10%, what percentage will the total cost of ownership increased. For the Graph 2,
its main purpose is to analyze what the total cost of ownership if the we increase the different
component as well as the overall transportation cost. In this way, we can also figure out the
important parts of the transportation cost so that it can help us to streamline and simplify the
transportation process as well. For the Graph 3, We used data table to analyze the productivity
changes for different utilization and different yield ranges.
Graph 1
As it shows in the Graph 1, the TCO cost is most sensitive to the material cost in China, and to
the Labor cost in The U.S. and Mexico. The Assembly and Utilities do not pose significant
influence to the TCO cost compare to the material Cost and Assembly Cost. The Consumables
cost, although has not that significantly influence on the TCO cost, but also moderately the TCO
cost in certain level.
6. Graph 2
As is shown in Graph 2, the transportation cost of TCO typically influence the Brazil
transportation line, especially for the Import duty and Transportation cost of Brazil. This is
mainly because that the Brazil have a fairly high customs duty for the electrical component in
the consideration of protect the local Hi-tech Industry. For the U.S, the US government has a
slacker policy for the electronic components. The US and Mexico also are all the member of the
NAFSTA, so these two governments enjoy a free-customs-duty policy.
7. Graph 3
SensitivityAnalysis of Tool A and Tool B productivity of utilization and yield factors
From the result of Graph 3, we can see for tool A, while utilization decreases from 0.7 to 0.5
and yield decreases from 0.97 to 0.96 or 0.95, the productivity of tool A cannot meet the
condition of 18000 units (1500 units per order per month) per year.
As for tool B, if utilization drops lower than 0.7 then no matter how many good products rate will
be (yield), tool B cannot meet the condition of 18000 units (1500 units per order per month) per
year.
8. RISK ASSESSMENT
1. Deliveryreliability
Sourcing from different parts of the world requires taking a country’s shipping
infrastructure into consideration. Not only can poor infrastructure add to total costs, but
also can affect customer satisfaction based on on-time delivery. In order to consider
robustness of infrastructure in both China and Mexico we utilized the Logistics
Performance Index (LPI). China received a score of 3.66 ranking 27th while Mexico
received a score of 3.11 ranking 54th. Based on these scores China would be
considered less of a logistical risk than Mexico.
2. Geopolitical unrest
Payson already has an assembly plant in Brazil, and now is considering adding an
assembly plant in either Mexico or China. Whenever operating in another country
geopolitical unrest is always a risk. The severity of that risk is based primarily on the
governmental stability. The less stable the government, the more likely negative
implications could occur. Some examples of unrest that could occur range from poor
economic conditions and higher taxation, tariffs, or duties, to rioting and nationalization
in the extreme case. China economy is relatively stable particularly in relation to
Mexico’s where drug cartels are an issue. We would therefore consider China a more
favorable risk from a Geopolitical perspective.
3. Risk of obsolescence
Being that these PLC chips are high tech components, obsolescence risk is a significant
factor. Already the useful life of the PLC chips is only 3 years, however in the technology
world 3 years can be considered to be quite a long time. As such there is always the risk
of obsolescence. There is always the possibility that a competitor could develop a new
advanced technology that will render the PLC chip obsolete. The primary factor that
should affect ability to respond to obsolescence risk is lead times. This would favor
Mexico over China due to the distance involved. That being said we would not expect
this difference in lead time to be a significant factor in regards to risk of obsolescence.
4. Currency exchange risk
Currency exchange risk is a global risk for any business these days, but of course that
risk is always greater when part of your business operations or your suppliers are
located abroad. In considering the currency exchange risk of both China and Mexico, we
looked up the S&P rating of each country. China’s S&P credit rating is AA- while
Mexico’s rating is BBB+. This is likely largely influenced by the Geopolitical unrest
9. factors discussed earlier. These credit ratings therefore lead us to favor China over
Mexico from a currency exchange risk.
5. Intellectual PropertyTheft
By outsourcing production of the PLC chips, Payson Electronics technology is out of
their hands and is being entrusted to the care of their supplier. This exposes them to the
possibility of intellectual property theft. If their supplier were to steal their technology they
could possibly turn into a competitor. Presumably Payson Electronics would have a
patent to protect their intellectual property, but even if that is the case it can be difficult to
enforce that outside of the US. There is no clear way to determine if China or Mexico
would like to engage in such an activity, rather it would be a general consequence and
concern resulting from the decision to work with a foreign supplier.
10. CRUCIAL PARAMETERS OF ASSESSMENT
Treatment of safety stock
Since that we want to choose the China-based company as our suppliers, we must consider the
issue of safety since there would be a longer lead time for the product delivery. As the lead time
is longer, we must put more safety stock just in case that we may be understock, which will
significantly influence our service level and also cause the downtime of the whole supply chain.
But we need to fully consider the proper EOQ level to avoid the dormant stocks.
Treatment of quality
Since now our suppliers are overseas, the quality of the components may not be sufficiently
monitored and the return of the defected products is also become difficulty. Therefore, in order
to solve this problem, there must be clarification of the duty on both the supplier side and the
customer side firstly. Secondly, certain agreement of the quality should also be signed so that
there may be sufficient protection on the legislative aspect to the customer. Moreover, it would
be better if the company can have the quality expats in the supplier sites to make sure the
supplier’s operation is going well.
Transport issue
Since now the company decides to choose the suppliers located in Asia, the transportation
network of the component must be well designed so that the logistics operation is highly efficient
and effective. Certain Third-Party Logistics can be chosen, since the overseas transportation is
far too complicated and needs expertise in this area. In this way, the company can fully focus on
the core competency and be more lean and efficient.
Treatment of tariffs, duties and taxes
As the company wants to choose China outside the country, the customs duty and tariffs seem
unavoidable and the company should fully plan for it because it may take a certain portion of the
total cost of the ownership.
Identification and discussion of hard versus soft dollar savings
Hard Savings
1. Reduction in unit cost of operations and unit cost of production
2. Reduction in transaction costs, overhead costs and transportation costs
3. Increased throughput, resulting in increased sales or revenue
Soft Savings
1. Reduction in cash flow and need for working capital
2. Avoidance of capacity enhancement
3. Conformation to changes in the law
4. Increased safety in the workplace
5. Increased employees’ and customers’ satisfaction
11. Exhibit 2: Packing Standard of the Chips for overseas transportation
125 chipswill be packedinone corrugatedbox of size 15” x 15” x 15” weighing7.8lbs
** we are considering 1 chipwillweigh1 ounce.
Therefore, there will be 4 boxes in case of 500 chips shipment and 8 boxes in case of 1000 chips
shipment.
4 corrugated boxes will be packed into one wooden pallets of size 35” x 20” x 37” weighing 44 lbs
includingweightof the pallet.
Therefore, there will be 1 wooden pallet in case of 500 chips shipment and 2 wooden pallets in case of
1000 chipsshipment.
These woodenpalletswill be shippedviastandardaircontainerstospecificdestinations.
To summarize:
125 chips/corrugated box
4 corrugated boxes/wooden pallet
12. Exhibit 3: Description of Costs
3.1 Tangible or Hard and Intangible or Soft Costs
1) Tangible or Hard Costs: Material costs, assembly costs, utilities, consumables,
labor costs, transportation costs
2) Intangible or Soft Costs: These costs might include dissatisfaction with working
conditions or customer disappointment with a decline in service or product quality.
In our analysis, we are not considering any set percentage for the intangible
costs.
3.2 Short-term and Long-termCosts
1) Short-term Costs: We are considering one-year period to analyze the short-term
costs. According to our analysis, material costs, assembly costs, utilities,
consumables, labor costs and transportation costs are all short term costs which
includes both fixed and variable costs over a period of 1 year.
2) Long-term Costs: We are considering three-year period to analyze the long-term
costs. According to our analysis, Purchase price of the tool is a long term cost
which will turn into variable cost over a period of 3 years because the shelf life of
the tool is given as 3 years and after that the tool will no longer be of any use.
3.3 Micro and Macro Costs
1) Macro Costs: Macro costs are the costs which affect the Total Cost to the
organization on the macro level. Small changes in these costs can affect the total
cost majorly. The top management is always concerned of the major costs while
working on cost reduction steps. In our analysis, material costs and labor costs
are the major costs.
2) Micro Costs: Micro costs are the costs which affect the Total Cost to the
organization on the micro level. Major changes in these costs will affect the total
cost a little. In our analysis, assembly costs, utilities, consumables and
transportation costs are micro costs in long term.
13. Exhibit 4: Sources of cost data
1. Transit Insurance
http://www.freightinsurancecenter.com/freightinsuranceonlinerates.htm
http://www.priorityworldwide.com/resources/cargo_insurance_guidelines.aspx
2. Air Freight Rates
https://www.fedex.com/ratefinder/home
http://worldfreightrates.com/freight
3. Road Transportation from airport to assembly location
https://www.freightcenter.com/quote/Index/
4. Import Duty and Taxes
http://thebrazilbusiness.com/import-tax-guide/electrical-apparatus-for-switching-
protecting-electrical-circuits-for/sp/85352100-1
https://www.usitc.gov/tata/hts/bychapter/index.htm
15. 5.1 Decision Making
Assembly Location
Supplier Selection USA Supplier China Supplier Mexico Supplier USA Supplier China Supplier Mexico Supplier
Total Material Cost (per unit) 3085 2500 2500 3085 2500 2500
PLC (bare) 1750 1500 1500 1750 1500 1500
Input Fiber Array (IFA) 185 150 150 185 150 150
Output Fiber Array (OFA) 1150 850 850 1150 850 850
No. of units per order 1000 1000 1000 500 500 500
Value of one order $3,085,000.00 $2,500,000.00 $2,500,000.00 $1,542,500.00 $1,250,000.00 $1,250,000.00
Transportation Process $18,525.00 $69,735.00 $210,811.20 $240,455.00
Transportation from plant to port of export NA Buyer Buyer NA Buyer Buyer
Unloading of truck at port of export NA Buyer Buyer NA Buyer Buyer
Custom clearance of goods and handover to airlineNA Buyer Buyer NA Buyer Buyer
Transit Insurance NA 0.70% 2.75% NA 0.70% 2.75%
Value of Transit Insurance $17,500.00 $68,750.00 $8,750.00 $34,375.00
Carriage charges to port of import NA $1,000.00 $960.00 NA $550.00 $480.00
Import customs clearance NA $25.00 $25.00 NA $20.00 $20.00
CIF Value of goods $2,518,525.00 $2,569,735.00 $1,259,320.00 $1,284,875.00
Import duties and taxes NA 0% 0% NA 16% 16%
$0.00 $0.00 $201,491.20 $205,580.00
Transportation to assembly location NA 100 100 NA 100 100
TOTAL LANDED COST OF ONE ORDER $3,085,000.00 $2,518,625.00 $2,569,835.00 $1,542,500.00 $1,460,911.20 $1,490,555.00
Material Cost per year $37,020,000.00 $30,223,500.00 $30,838,020.00 $18,510,000.00 $17,530,934.40 $17,886,660.00
Recommendation : China Supplier is best one.
Tool Type
Supplier Selection Tool A Tool B Tool A Tool B Tool A Tool B
Assembly Cost per year $190,400.00 $280,000.00 $190,400.00 $280,000.00 $190,400.00 $280,000.00
Purchase Price $170,000.00 $250,000.00 $170,000.00 $250,000.00 $170,000.00 $250,000.00
Yearly Maintenance $20,400.00 $30,000.00 $20,400.00 $30,000.00 $20,400.00 $30,000.00
Utilities $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00
Consumables per year $5,616,000.00 $5,616,000.00 $5,616,000.00 $5,616,000.00 $5,616,000.00 $5,616,000.00
Cost (per shift per year) $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00
Shifts per year 936 936 936 936 936 936
Labour cost per year $37,440,000.00 $37,440,000.00 $11,232,000.00 $11,232,000.00 $22,464,000.00 $22,464,000.00
Cost (per shift per year, assuming 1 operator per shift )$40,000.00 $40,000.00 $12,000.00 $12,000.00 $24,000.00 $24,000.00
Shifts per year 936 936 936 936 936 936
TOTAL $43,266,400.00 $43,356,000.00 $17,058,400.00 $17,148,000.00 $28,290,400.00 $28,380,000.00
Recommendation : Tool A is best one.
Kansas Brazil
USA Supplier China Supplier Mexico Supplier
5.2 Short-term (1 year) analysis
16. Supplier Selection
Tool Type Tool A Tool B Tool A Tool B Tool A Tool B
Material Cost (per unit) 3,085.00$ 3,085.00$ 2,500.00$ 2,500.00$ 2,500.00$ 2,500.00$
PLC (bare) 1,750.00$ 1,750.00$ 1,500.00$ 1,500.00$ 1,500.00$ 1,500.00$
Input Fiber Array (IFA) 185.00$ 185.00$ 150.00$ 150.00$ 150.00$ 150.00$
Output Fiber Array (OFA) 1,150.00$ 1,150.00$ 850.00$ 850.00$ 850.00$ 850.00$
Assembly Cost 190,400.00$ 280,000.00$ 190,400.00$ 280,000.00$ 190,400.00$ 280,000.00$
Purchase Price 170,000.00$ 250,000.00$ 170,000.00$ 250,000.00$ 170,000.00$ 250,000.00$
Yearly Maintenance 20,400.00$ 30,000.00$ 20,400.00$ 30,000.00$ 20,400.00$ 30,000.00$
Utilities 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$
Consumablesper year 5,616,000.00$ 5,616,000.00$ 5,616,000.00$ 5,616,000.00$ 5,616,000.00$ 5,616,000.00$
Cost (per shift per year) 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$
Shifts per year 936 936 936 936 936 936
Labour cost per year 37,440,000.00$ 37,440,000.00$ 11,232,000.00$ 11,232,000.00$ 22,464,000.00$ 22,464,000.00$
Cost (per shift per year, assuming 1 operator per shift ) 40,000.00$ 40,000.00$ 12,000.00$ 12,000.00$ 24,000.00$ 24,000.00$
Shifts per year 936 936 936 936 936 936
Total Cost except material cost 43,266,400.00$ 43,356,000.00$ 17,058,400.00$ 17,148,000.00$ 28,290,400.00$ 28,380,000.00$
No. of units ordered per year 18000 18000 18000 18000 18000 18000
Per unit cost except material cost 2,403.69$ 2,408.67$ 947.69$ 952.67$ 1,571.69$ 1,576.67$
TOTAL PER UNIT COST 5,488.69$ 5,493.67$ 3,447.69$ 3,452.67$ 4,071.69$ 4,076.67$
Assembly Location
Supplier Selection USA Supplier China Supplier MexicoSupplier USA Supplier China Supplier MexicoSupplier
No. of units per order 1000 1000 1000 500 500 500
Value of every order 5,488,688.89$ 3,447,688.89$ 4,071,688.89$ 2,744,344.44$ 1,723,844.44$ 2,035,844.44$
Transportation Process $118,925.71 $225,941.87 $290,473.93 $391,258.55
Transportationfrom plant toport of export NA Buyer Buyer NA Buyer Buyer
Unloading of truck at port of export NA Buyer Buyer NA Buyer Buyer
Custom clearance of goods andhandover toairline NA Buyer Buyer NA Buyer Buyer
Transit Insurance NA 0.70% 2.75% NA 0.70% 2.75%
Value of Transit Insurance $24,133.82 $111,971.44 $12,066.91 $55,985.72
Carriage chargesto port of import NA $1,000.00 $960.00 NA $550.00 $480.00
Import customsclearance NA $25.00 $25.00 NA $20.00 $20.00
CIF Value of goods $3,472,847.71 $4,184,645.33 $1,736,481.36 $2,092,330.17
Import duties andtaxes NA 2.7% 2.7% NA 16% 16%
$93,766.89 $112,985.42 $277,837.02 $334,772.83
Transportationtoassembly location NA 100 100 NA 100 100
TOTALCOSTOFOWNERSHIP $5,488,688.89 $3,566,714.60 $4,297,730.76 $2,744,344.44 $2,014,418.37 $2,427,202.99
Kansas Brazil
USA Supplier China Supplier MexicoSupplier
5.3 Long-term (3 years) analysis
17. Supplier Selection
Tool Type Tool A Tool B Tool A Tool B Tool A Tool B
Material Cost (per unit) 3,085.00$ 3,085.00$ 2,500.00$ 2,500.00$ 2,500.00$ 2,500.00$
PLC (bare) 1,750.00$ 1,750.00$ 1,500.00$ 1,500.00$ 1,500.00$ 1,500.00$
Input Fiber Array (IFA) 185.00$ 185.00$ 150.00$ 150.00$ 150.00$ 150.00$
Output Fiber Array (OFA) 1,150.00$ 1,150.00$ 850.00$ 850.00$ 850.00$ 850.00$
Assembly Cost 231,200.00$ 340,000.00$ 231,200.00$ 340,000.00$ 231,200.00$ 340,000.00$
Purchase Price 170,000.00$ 250,000.00$ 170,000.00$ 250,000.00$ 170,000.00$ 250,000.00$
Maintenance over 3 years 61,200.00$ 90,000.00$ 61,200.00$ 90,000.00$ 61,200.00$ 90,000.00$
Utilities per year 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$
Utilities for 3 year $60,000.00 $60,000.00 $60,000.00 $60,000.00 $60,000.00 $60,000.00
Cost (per shift per year) 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$
Shifts per year 936 936 936 936 936 936
Consumables per year 5,616,000.00$ 5,616,000.00$ 5,616,000.00$ 5,616,000.00$ 5,616,000.00$ 5,616,000.00$
Consumables for 3 years 16,848,000.00$ 16,848,000.00$ 16,848,000.00$ 16,848,000.00$ 16,848,000.00$ 16,848,000.00$
Cost (per shift per year, assuming 1 operator per shift ) 40,000.00$ 40,000.00$ 12,000.00$ 12,000.00$ 24,000.00$ 24,000.00$
Shifts per year 936 936 936 936 936 936
Labour cost per year 37,440,000.00$ 37,440,000.00$ 11,232,000.00$ 11,232,000.00$ 22,464,000.00$ 22,464,000.00$
Labour cost for 3 years 112,320,000.00$ 112,320,000.00$ 33,696,000.00$ 33,696,000.00$ 67,392,000.00$ 67,392,000.00$
Total Cost except material cost 129,459,200.00$ 129,568,000.00$ 50,835,200.00$ 50,944,000.00$ 84,531,200.00$ 84,640,000.00$
No. of units ordered within 3 years 54000 54000 54000 54000 54000 54000
Per unit cost except material cost 2,397.39$ 2,399.41$ 941.39$ 943.41$ 1,565.39$ 1,567.41$
TOTAL COST OF OWNERSHIP OVER 3 YRS. 5,482.39$ 5,484.41$ 3,441.39$ 3,443.41$ 4,065.39$ 4,067.41$
Assembly Location
Supplier Selection USA Supplier China Supplier Mexico Supplier USA Supplier China Supplier Mexico Supplier
No. of units ordered within 3 years 36000 36000 36000 18000 18000 18000
Value of every order 197,366,133.33$ 123,890,133.33$ 146,354,133.33$ 98,683,066.67$ 61,945,066.67$ 73,177,066.67$
Transportation Process $4,273,576.07 $8,121,385.63 $10,438,007.81 $14,063,559.09
Transportation from plant to port of export NA Buyer Buyer NA Buyer Buyer
Unloading of truck at port of export NA Buyer Buyer NA Buyer Buyer
Custom clearance of goods and handover to airline NA Buyer Buyer NA Buyer Buyer
Transit Insurance NA 0.70% 2.75% NA 0.70% 2.75%
Value of Transit Insurance $867,230.93 $4,024,738.67 $433,615.47 $2,012,369.33
Carriage charges to port of import NA $36,000.00 $34,560.00 NA $19,800.00 $17,280.00
Import customs clearance NA $900.00 $900.00 NA $720.00 $720.00
CIF Value of goods $124,794,264.27 $150,414,332.00 $62,399,202.13 $75,207,436.00
Import duties and taxes NA 2.7% 2.7% NA 16% 16%
$3,369,445.14 $4,061,186.96 $9,983,872.34 $12,033,189.76
Transportation to assembly location NA 100 100 NA 100 100
TOTALCOSTOF OWNERSHIPOVER 3 YEARS $197,366,133.33 $128,163,809.40 $154,475,618.96 $98,683,066.67 $72,383,174.47 $87,240,725.76
USA Supplier China Supplier Mexico Supplier
Kansas Brazil
19. 5.5 Sensitivity analysis for transportation costs
Assembly Location
Supplier SelectionUSA Supplier China Supplier Mexico Supplier USA Supplier China Supplier Mexico Supplier
No. of units ordered within 3 years36000 36000 36000 18000 18000 18000
Value of every order $197,366,133.33 $123,890,133.33 $146,354,133.33 $98,683,066.67 $61,945,066.67 $73,177,066.67
Transportation Process $4,273,676.07 $8,121,485.63 $10,438,107.81 $14,063,659.09
Transportation from plant to port of exportNA Buyer Buyer NA Buyer Buyer
Unloading of truck at port of exportNA Buyer Buyer NA Buyer Buyer
Custom clearance of goods and handover to airlineNA Buyer Buyer NA Buyer Buyer
Transit InsuranceNA 0.70% 2.75% NA 0.70% 2.75%
Value of Transit Insurance $867,230.93 $4,024,738.67 $433,615.47 $2,012,369.33
Carriage charges to port of importNA $36,000.00 $34,560.00 NA $19,800.00 $17,280.00
Import customs clearanceNA $900.00 $900.00 NA $720.00 $720.00
CIF Value of goods $124,794,264.27 $150,414,332.00 $62,399,202.13 $75,207,436.00
Import duties and taxesNA 2.70% 2.70% NA 16% 16%
$3,369,445.14 $4,061,186.96 $9,983,872.34 $12,033,189.76
Transportation to assembly locationNA 100 100 NA 100 100
TOTAL COST OF OWNERSHIP OVER 3 YEARS$197,366,133.33 $128,163,809.40 $154,475,618.96 $98,683,066.67 $72,383,174.48 $87,240,725.76
total cost of ownership without the insurance$127,296,578.47 $150,450,880.29 $71,949,559.01 $85,228,356.43
if the insurance increase by 10% 1.1
the increase value of transit insurance $953,954.02 $4,427,212.54 $476,977.02 $2,213,606.26
total cost of ownership with the insurance $128,250,532.49 $154,878,092.83 $72,426,536.03 $87,441,962.69
increased percentage 0.07% 0.26% 0.06% 0.23%
if the insurance decrease by 10% 0.9
the decrease value of insurance $780,507.84 $3,622,264.80 $390,253.92 $1,811,132.40
total cost of ownership without the insurance$128,077,086.31 $154,073,145.09 $72,339,812.93 $87,039,488.83
-0.07% -0.26% -0.06% -0.23%
total cost of ownership without the carriage $128,127,809.40 $154,441,058.96 $72,363,374.48 $87,223,445.76
if the carriage increase by 10% 1.1
the increased value of carriage $39,600.00 $38,016.00 $21,780.00 $19,008.00
tco with increased carriage $128,167,409.40 $154,479,074.96 $72,385,154.48 $87,242,453.76
increased carriage 0.003% 0.002% 0.003% 0.002%
if the carriage decrease by 10% 0.9
the decreased value of carriage $32,400.00 $31,104.00 $17,820.00 $15,552.00
the decreased value of carriage $128,160,209.40 $154,472,162.96 $72,381,194.48 $87,238,997.76
tco without increased carriage -0.003% -0.002% -0.003% -0.002%
tco without the customs duty $124,794,364.26 $150,414,432.00 $62,399,302.14 $75,207,536.00
if the carriage increase by 10% 1.1
the increased value of carriage $3,706,389.65 $4,467,305.66 $10,982,259.57 $13,236,508.74
tco with carriage $128,500,753.91 $154,881,737.66 $73,381,561.71 $88,444,044.74
increased percentage 0.26% 0.26% 1.38% 1.38%
if the carriage decrease by 10% 0.9
the decreased value of carriage $3,032,500.63 $3,655,068.26 $8,985,485.11 $10,829,870.78
tco with decreased carriage $127,826,864.89 $154,069,500.26 $71,384,787.25 $86,037,406.78
decreased percentage -0.26% -0.26% -1.38% -1.38%
tco without transportation process cost $123,890,133.33 $146,354,133.33 $61,945,066.67 $73,177,066.67
if increased the transportation cost by 10% 1.1
increased transportation cost $4,701,043.68 $8,933,634.19 $11,481,918.59 $15,470,025.00
tco with transportation cost $128,591,177.01 $155,287,767.52 $73,426,985.26 $88,647,091.67
increased percentage 0.33% 0.53% 1.44% 1.61%
if decreased the transportation cost 0.9
decreased transportation cost $3,846,308.46 $7,309,337.07 $9,394,297.03 $12,657,293.18
tco with decreased transportation cost $127,736,441.79 $153,663,470.40 $71,339,363.70 $85,834,359.85
decreased percentage -0.33% -0.53% -1.44% -1.61%
China -Kansas Mexico-Kansas China-Brazil Mexico-Brazil
Insurance impact 0.07% 0.26% 0.06% 0.23%
carriage 0.003% 0.002% 0.003% 0.002%
Import duty 0.26% 0.26% 1.38% 1.38%
transportation process 0.33% 0.53% 1.44% 1.61%
Kansas Brazil
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
1 2 3 4 5 6
Sensitivity Analysis for transportation solution
Insurance impact carriage Import duty transportation process
20. 5.6 sensitivity analysis for other costs
China - Kansas China - Brazil Mexico - Kansas Mexico - Brazil
0.70% 0.70% 2.68% 2.68%
0% 14% 0% 14%
$18,525.00 $69,735.00 $210,811.20 $240,455.00
Tool A Tool B Tool A Tool B Tool A Tool B
$37,020,000.00 $30,223,500.00 $30,838,020.00 $18,510,000.00 $17,530,934.40 $17,886,660.00
$190,400.00 $280,000.00 $190,400.00 $280,000.00 $190,400.00 $280,000.00
$170,000.00 $250,000.00 $170,000.00 $250,000.00 $170,000.00 $250,000.00
$20,400.00 $30,000.00 $20,400.00 $30,000.00 $20,400.00 $30,000.00
$20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00
$5,616,000.00 $5,616,000.00 $5,616,000.00 $5,616,000.00 $5,616,000.00 $5,616,000.00
$6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00
$37,440,000.00 $37,440,000.00 $11,232,000.00 $11,232,000.00 $22,464,000.00 $22,464,000.00
$40,000.00 $40,000.00 $12,000.00 $12,000.00 $24,000.00 $24,000.00
$80,286,400.00 $73,579,500.00 $47,896,420.00 $35,658,000.00 $45,821,334.40 $46,266,660.00
$43,266,400.00 $43,356,000.00 $17,058,400.00 $17,148,000.00 $28,290,400.00 $28,380,000.00
material cost increase by 10% per year 1.1
$40,722,000.00 $33,245,850.00 $33,921,822.00 $20,361,000.00 $19,284,027.84 $19,675,326.00
$83,988,400.00 $76,601,850.00 $50,980,222.00 $37,509,000.00 $47,574,427.84 $48,055,326.00
4.61% 4.11% 6.44% 5.19% 3.83% 3.87%
material cost decrease by 10% per year 0.9
$33,318,000.00 $27,201,150.00 $27,754,218.00 $16,659,000.00 $15,777,840.96 $16,097,994.00
$76,584,400.00 $70,557,150.00 $44,812,618.00 $33,807,000.00 $44,068,240.96 $44,477,994.00
-4.61% -4.11% -6.44% -5.19% -3.83% -3.87%
ost without assembly cost per year
$80,096,000.00 $73,299,500.00 $47,706,020.00 $35,378,000.00 $45,630,934.40 $45,986,660.00
1.1
assembly cost increase by 10% peryear
$209,440.00 $308,000.00 $209,440.00 $308,000.00 $209,440.00 $308,000.00
$80,305,440.00 $73,607,500.00 $47,915,460.00 $35,686,000.00 $45,840,374.40 $46,294,660.00
0.024% 0.038% 0.040% 0.079% 0.042% 0.061%
assembly cost decrease by 10% per year 0.9
$171,360.00 $252,000.00 $171,360.00 $252,000.00 $171,360.00 $252,000.00
$80,267,360.00 $73,551,500.00 $47,877,380.00 $35,630,000.00 $45,802,294.40 $46,238,660.00
-0.024% -0.038% -0.040% -0.079% -0.042% -0.061%
$80,266,400.00 $73,559,500.00 $47,876,420.00 $35,638,000.00 $45,801,334.40 $46,246,660.00
utilities increase by 10% 1.1
$22,000.00 $22,000.00 $22,000.00 $22,000.00 $22,000.00 $22,000.00
$80,288,400.00 $73,581,500.00 $47,898,420.00 $35,660,000.00 $45,823,334.40 $46,268,660.00
0.002% 0.003% 0.004% 0.006% 0.004% 0.004%
0.9
$18,000.00 $18,000.00 $18,000.00 $18,000.00 $18,000.00 $18,000.00
$80,284,400.00 $73,577,500.00 $47,894,420.00 $35,656,000.00 $45,819,334.40 $46,264,660.00
-0.0025% -0.0027% -0.0042% -0.0056% -0.0044% -0.0043%
$74,670,400.00 $67,963,500.00 $42,280,420.00 $30,042,000.00 $40,205,334.40 $40,650,660.00
consumables increase by 10% 1.1
$6,177,600.00 $6,177,600.00 $6,177,600.00 $6,177,600.00 $6,177,600.00 $6,177,600.00
$80,848,000.00 $74,141,100.00 $48,458,020.00 $36,219,600.00 $46,382,934.40 $46,828,260.00
0.70% 0.76% 1.17% 1.57% 1.23% 1.21%
consumables decrease by 10% 0.9
$5,054,400.00 $5,054,400.00 $5,054,400.00 $5,054,400.00 $5,054,400.00 $5,054,400.00
$79,724,800.00 $73,017,900.00 $47,334,820.00 $35,096,400.00 $45,259,734.40 $45,705,060.00
-0.70% -0.76% -1.17% -1.57% -1.23% -1.21%
$42,846,400.00 $36,139,500.00 $36,664,420.00 $24,426,000.00 $23,357,334.40 $23,802,660.00
labor cost increase by 10% 1.1
$41,184,000.00 $41,184,000.00 $12,355,200.00 $12,355,200.00 $24,710,400.00 $24,710,400.00
$84,030,400.00 $77,323,500.00 $49,019,620.00 $36,781,200.00 $48,067,734.40 $48,513,060.00
4.66% 5.09% 2.35% 3.15% 4.90% 4.86%
labor cost decrease by 10% 0.9
$33,696,000.00 $33,696,000.00 $10,108,800.00 $10,108,800.00 $20,217,600.00 $20,217,600.00
$76,542,400.00 $69,835,500.00 $46,773,220.00 $34,534,800.00 $43,574,934.40 $44,020,260.00
-4.66% -5.09% -2.35% -3.15% -4.90% -4.86%
US Suppliers for Tool A US Suppliers for Tool B China suppliers for Tool A China suppliers for Tool B Mexico Suppliers for Tool A Mexico Suppliers for Tool B
4.61% 4.11% 6.44% 5.19% 3.83% 3.87%
0.024% 0.038% 0.040% 0.079% 0.042% 0.061%
0.002% 0.003% 0.004% 0.006% 0.004% 0.004%
0.70% 0.76% 1.17% 1.57% 1.23% 1.21%
4.66% 5.09% 2.35% 3.15% 4.90% 4.86%
USA Supplier China Supplier Mexico Supplier
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
US Suppliers
for Tool A
US Suppliers
for Tool B
China suppliers
for Tool A
China suppliers
for Tool B
Mexico
Suppliers for
Tool A
Mexico
Suppliers for
Tool B
Sensitivity anaysis for tools and suppliers selections
Material Cost Assembly Cost Utilities Consumers Labor Cost
21. 5.7 Sensitivity analysis of productivity
Table 2: Productivity Drivers by Assembly Location and Tool Choice
Current
Supplier
Throughput per hour
Tool A 5 5 5
Tool B 4 4 4
Yield
Tool A 0.97 0.97 0.97
Tool B 0.98 0.98 0.98
Equipment Lifetime (both) 3 yrs 3 yrs 3 yrs
Shifts Per Day (both) 3 3 3
Workdays Per Week (both) 6 6 6
Delivery Reliability 0.995 0.98 0.99
Utilization 0.7 0.7 0.7
LeadTime (weeks) 0.5 4 2
Tool Productivity (thoughput per hour*yield*utilization*shifts hours per year)
A 25421.76
B 20547.072
Tool A
25421.76 0.5 0.6 0.7 0.8 0.9 UTILIZATION
0.95 17784 21340.8 24897.6 28454.4 32011.2
0.96 17971.2 21565.44 25159.68 28753.92 32348.16
0.97 18158.4 21790.08 25421.76 29053.44 32685.12
0.98 18345.6 22014.72 25683.84 29352.96 33022.08
0.99 18532.8 22239.36 25945.92 29652.48 33359.04
YIELD
Tool B
20547.072 0.5 0.6 0.7 0.8 0.9 UTILIZATION
0.95 14227.2 17072.64 19918.08 22763.52 25608.96
0.96 14376.96 17252.352 20127.744 23003.136 25878.528
0.97 14526.72 17432.064 20337.408 23242.752 26148.096
0.98 14676.48 17611.776 20547.072 23482.368 26417.664
0.99 14826.24 17791.488 20756.736 23721.984 26687.232
YIELD
Mexico
Supplier
China Supplier
22. RECOMMENDATION
Based on our analysis of the underlying factors, we recommend choosing Tool A for
production and choosing China supplier to produce the PLC chip. This recommendation is
based overwhelming evidence supported by our analysis. Our analysis found that regardless of
shipping location China had the lowest total cost of ownership in comparison to Mexico or US
even when taking sensitivity analysis into consideration. Further China has less intangible
expenses involved like less risk factors involved.
Another consideration in our recommendation to produce in China is that China’s economy is
growing by leaps and bounds right now. Therefore, it is more likely that China has the potential
to possibly become a consumer in the future. If this turned out to be the case, then Payson
Electronics would already have a supplier in China should they decide to establish an assembly
plant there. In all, when taking both tangible and intangible costs and benefits into consideration
China is the clear winner in the decision of where to source the PLC chips from.
Justification for the Recommendation
From the sensitivity analysis we given above, the TCO of the Chinese supplier tend to be
sensitive to the material cost, while on the other hand, TCO of US and Mexican suppliers tend
to be sensitive to the labor cost. This actually reflects that the Chinese Labors are cheaper and
take up a less portion of the Total Cost of Component structure. For the transportation Analysis
Part, the TCO of Chinese supplier seems to be less sensitive to the transportation cost. This is
mainly because that the Chinese logistic industry in now experiencing a significant growth
during these year. Also, the tariff also reduced since the Chinese government favored the
foreign capital to promote their domestic industry. Brazil, on the other hand, demands a higher
level of customs duty as they want to protect the electronic products industry within their country.
From a risk assessment perspective, there may be many risks given above due to the
outsourcing. Moreover, for the delivery reliability, since the logistic industry is now developing
quickly in China, they can provide the high-speed service with lower price. Therefore, choosing
a company in China can be with a lower risk of transportation costs. As for the Geographical
reason, China is definitely a safer place with less operations for the company to work on. In
addition, for the currency fluctuation risk, as the Chinese yuan is not devalued, it is more
beneficial for a foreign company to export goods from China. This is just a short-term effect; we
cannot predict the value of Chinese Yuan in the future. But there exists a significant risk in
China, which is the patent of the product may be plagiarized. Since the assembly process is not
a high-value added process, the risk of knock-off is not that severe in this production process.
When the company analyzes the cost component, they usually ignore the many kinds of soft
costs that also influence the operation of the business. From the perspective of soft costs, China
is much better for the suppliers’ decision. As China now is holding a reform and opening-up
policy, the government now is carrying out a policy that favors the international trade, and the
23. foreign company can enjoy quite a lot of favorable privileges, such as the preferential tariff
treatments and preferential duty treatments. What’s more, since china now is on a rapid
development stage, there are lots of infrastructures which are being set up in these years, so it
may be easier for the company to cooperate with these suppliers.