Demand for Bloomfield Guitars has outstripped the company's only factory’s production capacity. Management is considering building a new factory.
View Background
Among the questions to consider are:

  • how large a factory to build,
  • where in the world to build the factory,
  • future demand for guitars,
  • future guitar prices, wage and price advantages in foreign locations,
  • differences in worker productivity around the world,
  • differences in quality of output around the world,
  • shipping costs,
  • economies of scale, tariffs and quotas.
Sarah‘s research has found the following information:
Click on each row to see definitions of each term.
US China Poland Brazil
Average Wage 35.33 3.99 8.83 11.65
Productivity 100% 75% 70% 60%
Hours/Guitar 30.0 40.0 42.9 50.0
Ship to US $12 $48 $64 $36
Ship to EU $72 $32 $12 $76
Loan Interest rate 6% 11% 9% 11%
Inflation Rate 5% 10% 7% 10%
Cost Premium 0% 15% 5% 12%
Next
Where do you want to build the next Bloomfield Guitar Factory?
  • United States
  • China
  • Poland
  • Brazil
What size factory do you want to build?
  • 50%
  • 100%
  • 150%
  • 200%
What level of inflation are you forecasting?
  • Inflation
  • Hyperinflation
Forecast a level of demand between the US and Europe
Calculate
Options you chose:
Country:
Size:
Inflation:
Demand Mix: US: % Europe: %
Costs This year In 10 years In 20 years
Cost to make
Loan cost per unit
Cost to ship
Landed Cost
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Click on each row to see definitions of each term.