Co$t$ To Consider

Dec. 21, 2004

Manufacturers trying to decide where to locate a facility, and not only in Mexico or China, need to take several costs into account, advises The Offshore Group, Tucson, Ariz. Here's its list:

  • The cost of intellectual property.
  • The cost of additional inventory of goods in transit over long distances.
  • The cost of additional safety stocks to ensure uninterrupted supply.
  • The cost of warranty claims.
  • The cost of engineer visits or resident engineers.
  • The cost of senior executive visits to set up operations and relationships with suppliers and managers.
  • The cost of out-of-stocks and lost sales caused by long lead times.

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