Orleans, the window units will be distributed to the target markets, where a duty and drawback will be applied. Because the gadget came from the European Union (ELI) to the US and then back to the 3 EX. countries, the dutiable value is only assessed to the “total assembly cost minus gadget cost” at the 3 EX. distribution sites. For this option, the total assembly cost was $91. 48, and the gadget cost was $25, creating a dutiable value of $66. 48. The duty applied from the US to the EX. is 10%, and 18% to Istanbul. The duty is calculated using the formula shown above with the T/’ rate added on.
The duty drawback is 99% of the original duty rate (gadgets imported from Brussels to New Orleans), then multiplied by the demand to have the total drawback cost for each location. Option 2: Assembly in Istanbul, Turkey The option to produce the window units in Istanbul, Turkey requires gadgets and gadgets to be imported. Because the gadgets and gadgets are entering the Turkeys FUTZ, there is no import duty applied to the products. After the window units are assembled, an import duty will only be applied to the goods sent to the countries within the EX. (Spain/Portugal, Italy, and France).
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The import duty is applied to those countries because they lie in a different zone than the production site in Turkey. Even though the EX. is a FUTZ, only transactions made within that zone are beneficiaries of the rule. The duty rate for imports entering the EX. is 10%. In this option, the dutiable value is the total assembled cost of $82. 72. Option 3: Assembly in Saratoga, Spain The option to produce the window units in Saratoga, Spain requires gadgets and gadgets to be imported. Because the gadgets and gadgets are entering the European Union’s FUTZ, there is no import duty applied to the products.
After the window units are assembled, an import duty will only be applied to the goods sent to Istanbul, Turkey, because it does not lie within the Foot the European Union. The duty rate for imports entering Turkey is 18%. In this option, the dutiable value is the total assembly cost of $94. 66. NOTE: There are no drawbacks in Options 2 & 3 because there is no import duty cost applied to the gadgets and gadgets entering the assembling country. There are several common inherent risks shared by all regions regardless of the location Southern Air Conditioning, Inc. Shoes to assemble their window units. These include: transportation risks, delivery risks, quality risks, currency exchange risks Each assembly site requires at least one component to be imported. There is no absolute guarantee that can be made that would completely protect SAA from the loss of goods during their transport, or to a lesser extent their delayed delivery. There are many factors that can create situations where the product is delayed or not received at all and in turn would affect Sais’s delivery to its customers, their reputation, and penetrability amongst its distributors.
Insurance could be obtained to mitigate some risk, but there are many intangibles that could stand to be affected in any event. In addition, because the gadgets are outsourced, SAA takes on the risk that a major component of their final product may not meet expectations. SAA may currently have a good reputable supplier, however, they cannot be for certain that changes to the supplier’s labor source, management, machinery, and etc. May not affect product quality at some point during their relationship. And while Contracts of Sale and/or a
Bill of Exchange can be implemented to alleviate some of this risk, SAA could still face losses to sales if they have to delay delivery to their suppliers while waiting for quality components to assemble an acceptable finished product. And since all unfinished and finished products are being delivered to multiple countries and not bound to Just one location, the currency exchange risks would also affect every location as there is always a gap between the time a contract is made for the goods and the time the actual payment is received for them.
Furthermore, there are classic kiss associated with assembly in any location that affect any organization which includes: cultural, political, economic, financial, industry, and etc. Risks. Option 1: Assembly in New Orleans, US Risks specific to assembling products in the US include ever-changing economic conditions, after-effects of Strain still resounding, and perception and cultural differences from their target markets.
Option 2 & 3: Assembly in Saratoga, Spain or Istanbul, Turkey Risks specific to assembling products in the Saratoga & Istanbul, includes having all the finished dodo’s raw products being outsourced, leaving the assembly plant victim to many possible delivery delays, and having the assembly plant in a completely different location from headquarters and not being able to monitor all aspects of the supply chain as thoroughly.
According to the same McKinney study, Istanbul is responsible for 27 percent of Turkey’s GAP, with 20 percent of the country’s industrial labor force residing in the city. This provides SAA with a large labor pool to mitigate possible delivery risks. 5) Entry into the European Union. Turkey has a pending application to enter the EX.. This promising future would drastically change the import duties on SASS finished product. All of the demand locations would fall under the European Union Free Trade Zone, lowering costs and increasing opportunities for Southern Air Conditioning.