As a consultant to Defense Electronics Corporation (DEC), there are several factors to consider in determining the appropriateness of building an overseas manufacturing facility to produce radar detection systems. Some of the factors that can be considered include the cost of labour, cost of raw materials, tax policies, currency exchange rates, logistics, and political stability of the country in which the facility is to be built.
1. Cost of Labor: The cost of labor is a major factor to consider when establishing a manufacturing facility. It is important to assess the average wage rate in the country where the facility will be established and compare it to the wage rate in the United States.
2. Cost of Raw Materials: The cost of raw materials should also be taken into account. DEC should examine whether the country has the necessary raw materials or whether they need to be imported. If they need to be imported, it will be important to assess the cost of transportation and the country's trade policies.
3. Tax Policies: It is important to consider the tax policies of the country where the facility will be built. DEC should assess the tax rate on corporate income, capital gains, and import/export duties.
4. Currency Exchange Rates: The exchange rate is another important factor that needs to be considered. DEC should look into the volatility of the country's currency and how it affects the cost of manufacturing, as well as the risk of currency fluctuations.
5. Logistics: It is important to consider logistics, such as the cost of shipping products to the United States and the time it takes to get there. DEC should examine the transportation infrastructure and the cost of shipping goods.
6. Political Stability: DEC should assess the political stability of the country where the facility is to be built. This includes the country's laws, regulations, and the stability of the government to ensure that it is a safe place to invest and that the company's assets will be protected.