For many years, corporations have determined that is cheaper to manufacture many products overseas versus in the United States. One reason for this assessment is that labor is cheaper overseas than in the U.S. However, in recent years, you have seen the cost difference decrease. As an example, in late 2014, Apple announced it would build some of its Mac computers in the U.S. for the first time in almost a decade. In another example, in 2015, Google, and Motorola began manufacturing their Moto X smartphones in Texas; this became the first smart phone manufactured in the U.S.
For these companies and others, it is likely the U.S. manufacturing sites’ proposals did not meet the standard capital budgeting criteria, but they decided to manufacture some products in the U.S. For this assignment, you will conduct research, and then examine why the companies would increase their budgets and make this decision versus manufacturing all of their products overseas. As a guide, your research should include and answer the following questions:
- Why did Apple make the announcement to manufacture in the U.S.?
- What qualitative factors did these companies, such as Google and Apple consider when
deciding on U.S. manufacturers? - Why would these companies only produce some products in the U.S. and not all products?
- What challenges are posed by U.S. manufacturing and overseas manufacturing?
- What stakeholders are affected by these manufacturing decisions?
- What ethical issues arise from not producing in the lowest cost area?
Sample Solution
