Question

Chinese Sourcing and the Yuan. Harmison Equipment of Denver, Colorado, purchases all of its hydraulic tubing from manufacturers in mainland China. The company has recently completed a corporate-wide initiative in six sigmaMean manufacturing. Completed oil field hydraulic system costs were reduced 4.4% over a one-year period, from $884,000 to $845,104. The company is now worried that all of the hydraulic tubing that goes into the systems making up 22% o eir total costs wil be hit by the potential revaluation 0 the hinese y if some in Washington got her way. How ould a 2. % revaluation 0 the yuan against he a mpact total s stem costs? The current cost of the hydraulic tubing is S(Round to the nearest cent.)

Answer 1

Hey,

tus particular Amount(S) Brief Given in question eduction cost has been taken after six sigma/lean manufacting current cost of hydraulic system hydraulic tube balance cost present yuan status present cost of hydraulictubes(yuan) 845,104 finished good 185,923 1 raw material(845 104,22%) 659,181 Excluding hydraulic tubes $1/6.82 for 1 dollars 6.82 yuan can coeAsper t Exchange rate imported from china (As given in problem) 1,267,994 185923*6.82 chinese yuan If revaluation of yusn 12.3% $1/5.98 6.82 87.70%-5.98 26,116 212039-185923 26,116 resent cost of hydraulictubes($ Cost of hydraulic tubes will increase(S) it wi change in cost(S) 2 212,039 1267994/5.98 l ulti increase the hydraulic system cost($ 871,220 659181+212039

here is solution for your Question,

exchange rate taken on the basis of current exchange market rates that is for $1/6.82 yuan.