Appliance Manufacturing in a Foreign Country

The problem situation involves a proposal to conduct manufacturing operations for washing machine household appliances in a foreign country. The products produced by the foreign manufacturing facility will be marketed in the United States and in countries surrounding the country hosting the manufacturing facility. The specific issues addressed in this white paper are (a) host country selection, (b) host country risk assessment, (c) financing the foreign manufacturing facility, (d) current financial risk reduction, and (e) future financial risk reduction.

The principal reason for selecting a manufacturing site for washing machine production that is located outside of the United States is to take advantage of lower costs for direct labor. Simultaneously, however, direct labor savings must be sufficient to more than offset transportation costs associated with importing the finished goods to the United States. An additional profit sou

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Category: Economics - A