
L
anded cost becomes the key factor in making sure that
foreign sourcing provides competitive advantage. It is
the total aggregate of all the costs to develop and bring a
product to utilization or revenue. Understanding how
landed cost works is a key ingredient to ensuring that off-
shore production is viable and to ensure competitive in-
bound supply chains.
Developing Landed Cost Models
A company must develop landed cost models to clearly
and more accurately understand the cost to manufacture
and import goods into the United States. Too often, pur-
chasing executives make decisions based on ex works pur-
chase price, which is normally much less in overseas ...