CHAPTER 14: INTERNATIONAL LOGISTICS

Question 1: Assume you are Vanderpool. Draft the comparison Pon just requested.

Question 2: Which of the two routing alternatives would you recommend? Why?

Question 3: Assume that the buyer in Saudi Arabia has made other large purchases in the United States and is considering consolidating all of its purchases and loading them onto one large ship, which the buyer will charter.

Question 4: Answer question 3 with regard to changing the terms of sale to delivery at port in Baltimore. The buyer would unload the trucks from the railcars.

Question 5: Is there an interest rate that would make HDT change from one routing to another? If so, what is it?

Question 6: Assume that it is the year 2005 and the cost to HDT of borrowing money is 12% per year. Because the buyer will pay for trucks as they are delivered, would it be advantageous for HDT to pay overtime to speed up production, ship the trucks as they were finished via the Port of Baltimore, and collect their payment earlier?

CASE 12-2: BELLE TZELL CELL COMPANY

Questions 1-5: Questions 1–4 ask for the total inventory carrying costs of alternatives 1 through 4, respectively; question 5 asks for which alternative Kupferman should recommend and why.

Question 6:Tzell “wanted enough inventory in reserve that the Tzell Cell Company could fill 99% of all orders on time.” This is, as you may recall, a customer service standard. How reasonable is a 99% level? Why not, say, a 95% level? How would Nell and Kupferman determine the relative advantages and disadvantages of the 95% and the 99% service levels? What kind of cost calculations would they have to make?

Question 7:Jedson Electronic Tools invoked a penalty clause on a purchase order that Tzell Cell Company had accepted and the Tzell Cell Company had to forfeit $3,000. Draft, for Nell Tzell’s signature, a memo indicating when and under what conditions the Belle Tzell Cell Company should accept penalty clauses in purchase orders covering missed delivery times or “windows.”

Question 8: In your opinion, is it ethical for a U.S.–based firm to relocate some of its operations in Mexico so as to avoid the stricter U.S. pollution and worker-safety laws? Why or why not?

Question 9: Should the firm be willing to pay bribes at the Mexican border to get their shipments cleared more promptly? Why or why not?