European distribution center site

Assignment Help Accounting Basics
Reference no: EM13918787

Selecting a European Distribution Center Site for American International Automotive Industries

American International Automotive Industries (AIAI) manufactures auto and truck engine, transmission, and chassis parts for manufacturers and repair companies in the United States, South America, Canada, Mexico, Asia and Europe. The company transports to its foreign markets by container ships. To serve its customers in South America and Asia, AIAI has large warehouse/distribution centers. In Europe it ships into Hamburg and Gdansk, where it has contracted with independent distribution companies to deliver its products to customers throughout Europe. However, AIAI has been displeased with a recent history of late deliveries and rough handling of its products. For a time AIAI was not overly concerned since its European market wasn't too big and its European customers didn't complain. In addition, it had more pressing supply chain problems elsewhere. In the past five years, since trade barriers have fallen in Europe and Eastern European markets have opened up, its Europeans business has expanded, as has new competition, and its customers have become more demanding and quality conscious. As a result, AIAI has initiated the process to select a site for a new European warehouse/distribution center. Although it provides parts to a number of smaller truck, and auto maintenance and service centers in Europe, it has seven major customers-auto and truck manufacturers in Vienna, Leipzig, Budapest, Prague, Krakow, Munich, and Frankfurt. Its customers in Vienna and Budapest have adopted manufacturing processes requiring continuous replenishment of parts and materials.

AIAI's European headquarters is in Hamburg. The vice-president for construction and development in Dayton, Ohio, has asked the Hamburg office to do a preliminary site search based on location, geography, transportation, proximity to customers, and costs. The Hamburg office has identified five potential sites in Dresden, Lodz, Hamburg, Gdansk, and Frankfurt. The Hamburg office has forwarded information about each of these sites to corporate headquarters, including forecasts of the number of containers shipped annually to each customer as follows: Vienna, 160; Leipzig, 100; Budapest, 180; Prague, 210; Krakow, 90; Munich, 120; and Frankfurt, 50. When the vice-president of construction in Dayton received this information, he pulled out his map of Europe and began to study the sites.

Assist AIAI with its site selection process in Europe. Recommend a site form the five possibilities, and indicate what other location factors you might consider in the selection process.

Scenario: Question

You are an independent consultant, hired by the Vice President of Construction, American International Automotive Industries (AIAI). Review Case Problem S7-1. Conduct an appropriate quantitative analysis and provide the vice president with a decision support paper addressing the issues within the Case Problem.

Specific guidance: You are expected to use the quantitative analysis methods within this module to arrive at conclusions and provide supported recommendations within your formal paper. You should select appropriate graphical presentation methodologies to present this material within the paper. Include all computation materials as appendices to the completed report.

Reference no: EM13918787

Questions Cloud

Develop cost estimates for completing the restoration : Develop cost estimates for completing the restoration based on both a best- and worst-case analysis. Assume that the total restoration cost is the sum of the labor cost plus the material cost.
Common stock as a long term investment : Common stock as a long term investment. Steig. Corporation uses the equity method of accounting for this investment.
Identify the four basic financial statements : Identify the four basic financial statements. Describe the purpose of each of the four financial statements. Discuss how the financial statements would be useful to internal users, such as to managers and employees. Discuss how the financial statemen..
Report for the insurance company : Suzuki is fully insured for fire losses but must prepare a report for the insurance company.Compute the gross profit rate for November.
European distribution center site : American International Automotive Industries (AIAI) manufactures auto and truck engine, transmission, and chassis parts for manufacturers and repair companies in the United States, South America, Canada, Mexico, Asia and Europe. The company transp..
Net present value if the cost of capital : What is the net present value if the cost of capital is 12 percent? Use the time value of money charts for your calculations. (Ignore income taxes.) Round your answer to the nearest whole number.
Why is innovation important to the growth of organizations : How would you characterize and contrast these different types of characteristics? Can you relate them to your own experience in your work environment?
What is the expected project completion time : Draw a project network. Develop an activity schedule. What are the critical activities, and what is the expected project completion time?
What market factors affect the commercialization process : What are the arguments for and against allowing temporary monopolies by allowing intellectual property rights? What forms of intellectual property exist for designs, and how are these different from patents and copyright?

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Define a founders agreement explain the purpose of buyback

what is a founders agreement? describe the purpose of a buyback clause and why its important.list and explain four 4

  If town home collected an additional 50000 on outstanding

in order to resolve its cash flow problems town home company assigned 420000 of its accounts receivable to wargo

  Depreciation for annual adjustment purposes

Which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $24,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month ..

  Write down a 3-4 page apa format paper on how a company

write down a 3-4 page apa format paper on how a company might overstate performance and why it can occur. also discuss

  Expenditure recorded as an asset

When should an expenditure be recorded as an asset rather than an expense?

  What is the contribution margin ratio

What is the contribution margin ratio?

  Quayle oil company is considering investing in a new oil

quayle oil company is considering investing in a new oil well. it is expected that the oil well will increase annual

  Marina manufacturing is considering buying new equipment

marina manufacturing is considering buying new equipment for its factory. the new equipment will reduce variable labor

  During the current year brewer company acquired all of the

during the current year brewer company acquired all of the outstanding common stock of miller inc. paying 12000000

  Shirtz community hospital has decided to estimate costs by

shirtz community hospital has been under increasing pressure to be accountable for its patient charges. the hospitals

  Linda and don are married and file a joint return in 2013

linda and don are married and file a joint return. in 2013 they received 12000 in social security benefits and 35000 in

  Annual physical inventory of assets

Please describe audit tests that you would perform for additions and retirements to fixed assets and depreciation expense (one for each category). Does it make a difference if the company does an annual physical inventory of assets?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd