This case examines a U.S. shoe manufacturer’s decision to potentially offshore production. Key considerations include demand factors, technological factors, supply factors, and macroeconomic/regulatory factors. A unit profitability analysis compares U.S. vs. Vietnam manufacturing, revealing higher profitability in Vietnam despite increased quality issues and transportation costs. The analysis then incorporates total landed cost, considering lead times, demand volatility, and working capital costs. Using a formula accounting for these factors, the recommendation is to manufacture 80% of shoes in Vietnam and 20% in the U.S. This strategy optimizes profitability while hedging against demand volatility and working capital costs. Follow-up steps include sensitivity analysis on quality, transportation, and tariff costs, as well as potential changes in demand volatility.