Rejection Cost. From the perspective that my profit is someone else’s loss, and someone else’s profit is my loss, the fact that I have to reject an opportunity to make money for my circumstances is a loss for me and an act of giving someone else a profit. In other words, my added value is not determined solely by productivity but also by the marginal utility generated by the law of supply and demand. Therefore, my labor price should reflect the value that I have given up—the profit I could have gained. If the rejection cost is not included in my profit, I will be at a loss to that extent. Failing to account for rejection costs in production expenses is not wise, but foolish, because it risks my survival. There is no absolute value in this world. All economic values are relative. - Joseph’s “just my thoughts”
Here a product is being made by only three countries, South Korea, China, and Japan. It's not a semiconductor but a nail clipper. You might think that a nail clipper is not a big deal, but it's not as simple as that. Nail clippers are a combination of all sorts of advanced technologies. In the 1980s, South Korea could produce submarines and battleships, but they did not possess the technology to produce nail clippers. When the upper and lower teeth are in mesh, the chink must be 0.1 to 0.2 millimeters. When perfect engagement, the nail is not cut properly on the contrary, the outrange of this tolerance, is cut out coarsely. Today, thanks to technological advances, South Korea has been able to narrow this chink to between 0.05 and 0.08 millimeters. South Korea, to achieve this goal, produces a special steel called "15CM" through POSCO which is specially made for this nail clipper. Many different advanced technologies are combined in this tiny nail clipper. Don't ...