East West Distributing Is in the Process of Trying to Determine

question 41

Essay

East West Distributing is in the process of trying to determine where it should schedule next year's production of a popular line of kitchen utensils that it distributes.Manufacturers in four different countries have submitted bids to East West.However,a pending trade bill in Congress will greatly affect the cost to East West due to proposed tariffs,favorable trading status,etc.After careful analysis,East West has determined the following cost breakdown for the four manufacturers (in $1000s)based on whether or not the trade bill passes: ​
a.If East West estimates that there is a 40% chance of the bill passing,which country should it choose for manufacturing?
b.Over what range of values for the "bill passing" will the solution in part (a)remain optimal?
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Definitions:

Term

In finance, refers to the length of time until a financial contract expires. In other contexts, it can mean a specific period or duration.

Secondary Capital Market

The financial market where investors buy and sell securities they already own, as opposed to the primary market where securities are issued for the first time.

10-Year Bond

A long-term debt security issued by governments or corporations with a maturity of ten years.

Transaction

The act of conducting a trade or business deal involving the exchange of goods, services, or financial assets.