Chatgpt

Let’s analyze the cost implications for Walmart when choosing between manufacturing t-shirts in Vietnam versus West Virginia, considering a 50% tariff on Vietnamese imports.

Cost Breakdown:

1. Vietnam Production:

• Manufacturing Cost: $2 per t-shirt 

• Tariff (50%): $1 (50% of $2)

• Total Cost: $3 per t-shirt 

2. West Virginia Production:

• Manufacturing Cost: $20 per t-shirt

• Tariff: None

• Total Cost: $20 per t-shirt 

Decision Analysis:

Even with the 50% tariff applied to Vietnamese imports, the total cost of producing a t-shirt in Vietnam ($3) remains significantly lower than producing the same t-shirt in West Virginia ($20). This substantial cost difference suggests that Walmart would likely continue sourcing t-shirts from Vietnam to maintain lower production expenses.

Additional Considerations:

While the direct manufacturing costs heavily favor Vietnamese production, Walmart may also consider factors such as supply chain reliability, shipping costs, and potential public relations benefits of domestic manufacturing. However, given the stark contrast in production costs, it’s probable that Walmart would prioritize the more economical option to remain competitive in pricing.

Conclusion:

Based on the cost analysis, Walmart would likely:

A) Continue using the Vietnamese factory.