. The considered cost factors:
± Production costs of specified parts and components in each country
± The cost of each part or component in each country is determined by
the cost factors of four major production resources. These are direct
labour expense, operation expense, materials expense and indirect
expense.
± Transportation cost of parts and components between two countries
± Transportation is assumed to be only via the sea. The expense is
calculated based on the volume ratio of each part to the capacity of a
``20 foot'' marine container and its transportation fee between two
countries.
± Import tariff of each country
± This tariff rate of each country is determined based on the current
average rate settled by each country. However, the rates between
ASEAN countries are assumed to be half the rates of other countries.
This reflects the idea of a perfect ASEAN free trade area, which is the
policy of the AFTA organisation to encourage import/export activity
in this region.