Case Study Supply Chain
CASE 14-2: TRIGO EXPORT CO., LTD.
The pricing of products for export sale is covered here, with logistics practices and costs having considerable influence.
Question 1: Ziola’s export packaging materials consisted of at least 40% recycled contents. Should this be mentioned in the quotation given to the potential Brazilian buyer?
It would not hurt in case somebody reviewing the bid happened also to be interested in environmental protection. However, note that they are buying tractors to use in Brazil.
Question 2: Each package in this shipment will be bar coded. Is this an example of supply-chain integration? Why or why not?
It is an example of supply-chain integration, although one again is uncertain how useful this might be in the Brazilian market for tractors.
Question 3: What price should be quoted for 40 tractors?
Note that 24 tractors can be carried inside a 20-foot container. Here are the costs of shipping 40 tractors: Type of cost | Cost ($) | Tractors (40 x $700) | 28,000 | Rail to Halifax (2 containers) | 800 | Ocean freight | 4,400 | Insurance on land (1% of $28,000) | 280 | Insurance on sea (2% of $28,800) | 576 | Documentation | 250 | Subtotal | 34,306 | | | Interest (.12 x [25/365] x 34,306) | 282 | Subtotal | 34,588 | | | 10% markup | 3,459 | Total | 38,047 | $38,047 divided by 40 tractors equals $951.18 per tractor
Question 4: What price should be quoted for 100 tractors?
Here are the costs of shipping 100 tractors: Type of cost | Cost ($) | Tractors (100 x $700) | 70,000 | Rail to Halifax (5 containers) | 2,000 | Ocean freight | 11,000 | Insurance on land (1% of $70,000) | 700 | Insurance on sea (2% of $72,000) | 1,440 | Documentation | 250 | Subtotal | 85,390 | | | Interest (.12 x [25/365] x $85,390) | 702 | Subtotal | 86,092 | | | 10% markup | 8,609 | Total | 94,701 |
$94,701 divided by 100 equals $947.01 per tractor
Question 5: Is there another quantity between 40 and
The pricing of products for export sale is covered here, with logistics practices and costs having considerable influence.
Question 1: Ziola’s export packaging materials consisted of at least 40% recycled contents. Should this be mentioned in the quotation given to the potential Brazilian buyer?
It would not hurt in case somebody reviewing the bid happened also to be interested in environmental protection. However, note that they are buying tractors to use in Brazil.
Question 2: Each package in this shipment will be bar coded. Is this an example of supply-chain integration? Why or why not?
It is an example of supply-chain integration, although one again is uncertain how useful this might be in the Brazilian market for tractors.
Question 3: What price should be quoted for 40 tractors?
Note that 24 tractors can be carried inside a 20-foot container. Here are the costs of shipping 40 tractors: Type of cost | Cost ($) | Tractors (40 x $700) | 28,000 | Rail to Halifax (2 containers) | 800 | Ocean freight | 4,400 | Insurance on land (1% of $28,000) | 280 | Insurance on sea (2% of $28,800) | 576 | Documentation | 250 | Subtotal | 34,306 | | | Interest (.12 x [25/365] x 34,306) | 282 | Subtotal | 34,588 | | | 10% markup | 3,459 | Total | 38,047 | $38,047 divided by 40 tractors equals $951.18 per tractor
Question 4: What price should be quoted for 100 tractors?
Here are the costs of shipping 100 tractors: Type of cost | Cost ($) | Tractors (100 x $700) | 70,000 | Rail to Halifax (5 containers) | 2,000 | Ocean freight | 11,000 | Insurance on land (1% of $70,000) | 700 | Insurance on sea (2% of $72,000) | 1,440 | Documentation | 250 | Subtotal | 85,390 | | | Interest (.12 x [25/365] x $85,390) | 702 | Subtotal | 86,092 | | | 10% markup | 8,609 | Total | 94,701 |
$94,701 divided by 100 equals $947.01 per tractor
Question 5: Is there another quantity between 40 and