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Essay / Research Paper Abstract
This 7 page paper is written in two parts. The first part looks at the different variables that may influence a company in deciding which country to set up production facilities. The factors consider include direct and indirect labor costs, trade tariffs and local infrastructure. The second part of the paper considers Chile as a destinations, looking at international trade agreements and the labor force. The bibliography cites 3 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEasscountry.rtf
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Unformatted sample text from the term paper:
considered in order to make a decision that is most advantageous to the company. The variables that a company may want t consider may reflect either the inputs the
transformation processes or the outputs, or if many cases more than one of the areas. The availability and cost of the different factors as well as their influences are all
important. If we consider the situation were the goods are to be made in one country, but then to be exported to the market country, then it is the
inputs and the transformation tat are most important. One of the main variables for of consideration may be the labor force. The first consideration that may be made is the
cost of the labor. This will look at the average wages of the area and the cost of employment. Many developing countries have attracted investment from foreign firms due to
the high different in the cost of labour. The rates of pay in developing and less developed countries may be much less in the west. If we look at Nike
as an example there are known labor costs to some of their subcontractors which can explain why this is such an important variable. for example it has been cited that
in the Dominican Republic the wages are only $.70 an hour, and with sweatshirts stitched on a total of 6.6 minutes it has been calculated that the labour on a
childs sweatshirt that costs US$ is only $0.11 even though is sells for $22.99 (Skenazy, 2001). The cost advantage is one for of comparative advantage, an area where the country
has a major benefit (Nellis and Parker, 2000) However it is not only the direct wages that need t be considered in the cost of the labour. There are also
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