Outsourcing Apple IPad Production Research Paper

Outsourcing Apple IPad Production - Research Paper Example Apple’s IPad is one of the products, which was originally produced in the United State, but its production has currently been outsourced to oversea industries based in North Korea and China. In order to understand the basics of outsourcing strategies, this paper provides a cost break-down of processes involved in the production of Apple IPad, both in the United States and contracting oversea countries. It also discusses the advantages and disadvantages of outsourcing IPad production to oversea firms. As part of this paper, some legal and ethical issues that arise as a result of outsourcing Apple IPad are also discussed. Key words: outsourcing, Apple IPad, and economy Introduction Apple iPad is a modern piece of electronic that performs most of the functions just like a personal computer. Because of its light weight and efficiency, it is highly fantasized by people who need to walk around with their computers, while performing certain tasks (OGrady, 2009). The high demand for t his product, both inside and outside the United States, has forced the Apple Inc. to incur large transportation costs so as to reach its local and international customers, something that has significantly increased the cost of production. In order to limit cost of production resulting from importation of material, shipping of the products and labor costs, Apple Inc. realized that outsourcing of IPad production to overseas firms, especially with a large number of customers, will significantly reduce its cost of production and maximize profit (Hill & Jones, 2009). Samsung Company based in North Korea, and some other electronic firms based in China are some of firms that are currently producing Apple IPad. These firms produce Apple IPad and distribute them to both local and international customers. This means that less cost of transportation is incurred when this product is sold to the local customers more than if it was produced in the United States, and sold in either North Korea or China (Schniederjans, 2005). Cost Break-down for the Production of Apple IPad Material, transportation and labor costs are the key determinant of Apple IPad production cost. Apple iPad 2 was the most talked about consumer electronic that was released into the market in 2011 (Sparks, 2011). The price break-down cost for manufacturing 32GB GSM/HSPA version (From iSuppli) in the United States and oversea