GE a Us based company is planning to move its gas range assembly operations from US to S. Korea. It takes 3 hours of labor to assemble the gas range. both in US and S Korca. Hourly labor rate in US is $ 30. Hourly labor rate in S. Korea is $ 10. Holding cost in US per gas range per weck is $ 3. In S. Korea this is $ 2. In US orders are placed with factory weekly with lead time of 3 weeks. In S Korea orders are placed with factory weekly with lead time of 9 wecks. Weekly demand is 450 with standard deviation of 100. It operates with in stock probability of 0.995 (z = 2.58) What would be the change in total holding and labor cost by moving the assembly from US to S. Korea ?

Practical Management Science
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GE a Us based company is planning to move its gas range assembly operations from US to S. Korea. It takes 3 hours of labor to assemble the gas range. both in US and S Korca. Hourly labor rate in US is $ 30. Hourly labor rate in S. Korea is $ 10. Holding cost in US per gas range per weck is $ 3. In S. Korea this is $ 2. In US orders are placed with factory weekly with lead time of 3 weeks. In S Korea orders are placed with factory weekly with lead time of 9 wecks. Weekly demand is 450 with standard deviation of 100. It operates with in stock probability of 0.995 (z = 2.58) What would be the change in total holding and labor cost by moving the assembly from US to S. Korea ? Show all formulas used, calculations and results.
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