Reference no: EM131735976

?Recently, Abercrombie? & Fitch? (A&F) began shifting a large portion of its Asian deliveries to the U.S. from air freight to slower? , but cheaper ocean freight. Shipping costs have been cut? dramatically, but shipment times have gone from days to weeks. In addition to having less control over inventory and being less responsive to fashion? changes, the holding costs have risen for the goods in transport.? Meanwhile, Central America might offer an inexpensive manufacturing alternative that might reduce shipping time through the Panama Canal? to, say, 7 ?days, compared? to, say, 30 days from Asia. Suppose that? A&F uses an annual holding rate 30?%. Suppose further that the product costs ?$25 to produce in Asia. Assuming that the transportation cost via ocean linear would be approximately the same whether coming from Asia or Central? America, what would the maximum production cost in Central America need to be in order for that to be a competitive source compared to the Asian? producer?

The maximum production cost in Central America should be ?$____ ?(round your response to two decimal? places).