Business : K178 2pgs Offshore Manufacturing.edited

Running head: OFFSHORE MANUFACTURINGOffshore manufacturingInstitution AffiliatedDate1OFFSHORE MANUFACTURINGOffshore manufacturing is perhaps one of the many ways businesses try to reduceoperational costs by relocating its production plants to areas with cheap labor. However, thistrend does not come without a cost. First, consider the transportation cost (Meredith, 1987).Because products are produced in Canada, they have to be transported to the U.S where themarket is. The cost of transportation can be higher than the additional labor cost. Furthermore,the transportation time is costly to the company. This includes the handling costs of the finishedproducts all the way from the plant to the market. There are also operational delays which mightcause delays in processing or orders for customers. There is also the cost of storage because thecompany will have to install or hire a warehouse near the market. There are also tariff chargeswhen these products are considered imports by the U.S authorities. This includes the importduties and other levies on the finished products as they enter the U.S market. This makesoperations complex because the company has to maintain ...


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