Which is the most favorable production location

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Reference no: EM131255091

Refer to given Problem. Shipping cost from Myanmar to Denver, Colorado, the final destination, is $1.50 per unit. Shipping cost from China to Denver is $1 per unit, while the shipping cost from Billings to Denver is $.25 per unit. Considering both labor and transportation costs, which is the most favorable production location?

Problem:-
In Myanmar (formerly Burma), 6 laborers, each making the equivalent of $3 per day, can produce 40 units per day. In rural China, 10 laborers, each making the equivalent of $2 per day, can produce 45 units. In Billings, Montana, 2 laborers, each making $60 per day, can make 100 units. Based on labor costs only, which location would be most economical to produce the item?

Reference no: EM131255091

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