In Barber’s case the cost of quality becomes a major problem if they are supplying recycled blouses then they need to hire an specialist to see if the material is contagious or meet all the ISO requirements and also second quality merchandise must often discounted quickly. The currency risk is another issue when locking the price in the agreement will not give the accurate picture that how much money you need to pay – the organization will pay with the current international rate of US S, If LOS$ Is the agreed currency. This risk Is associated more with the pricing and can complicate with the negotiations.
Another risk Is that leaning with the immature suppliers is the biggest obstacle or risk because by sitting too far you cannot know the supplier very well and you can do nothing except assuming things about the supplier so that can be avoided by buying from the domestic sources as you always have a chance to know the supplier in personal from the people In the market you are already In and the people who are already purchasing stuff from that supplier and other reliable sources. There would also be a political risk which can caused the supply Interruptions and add uncertainty to delivery; this can result in delays and loss to both parties. Purchase contracts issued by Barber’s firm provide for the goods to be produced, shipped, and received within five months of the date the contract is issued. Should the monetary amounts specified In the contract be In U. S. Dollars or In the currency of the nation where the manufacturer Is located? Why? Based on the information I would say that US$ would be the form for the currency because if you agree to get your payment in other currency then the contract is at risk for devaluing the price of the agreement. US$ is seen as more stable and international currency for international contracts.
The US $ would also protect the buyer and seller from unnecessary shift from the conversion rates between the currency I. E. Buying In Chinese Yuan and then transferring to US and vice versa. Another argument is that the recent economic downturn has to some extent caused swings in the exchange rates and as a result, foreign currencies are depreciating against the U. S. Dollar. Many businesses abroad prefer to transact in U. S. Dollars due to its strength. As a result for a business person here it will be a lot easier to specify in contractual agreements the use of U. S. Dollars unless the business partner .
Title to the goods can pass from seller to buyer at any point between the seller’s shipping dock and the buyer’s receiving dock. Which point should be used for the blouses Barber’s firm is buying? Why? The buyers receiving dock should be used for the blouses Barber’s firm is buying. From the point of shipment up until it’s received, the seller will still have ownership of the title should there be any enforceable events occurring in-transit. Also, the receiving dock will have to do a quality check of all products received and variances should be communicated back to the seller for reimbursement. 4. One of the concerns of U. S. Detail chains is the possibility that goods they import have been made by child or prison labor. How can Barbara prevent this from happening with products that she buys for her chain? One way of doing it is to check the local government legislations about child labor and also see if those rules are in line with United Nations regulations. The factories should be clear of child and prison labor and must follow strict guidelines in respect to it. Barbara can prevent goods they import made by child or prison labor by constantly reviewing the consumer alert reports that has a listing of all products dad by child or prison labor.
She can also pay a surprise visit to the suppliers manufacturing plant and ask for a business tour within the plant. In addition, Barber’s organization can adopt the same policy implemented by Levi, The Gap, Guess and many more on the same “No Sweat” policy that ensures that their stores do not carry products made through child or prisoner exploitation. 5. Barber’s firm makes many purchases in Asia. How should they manage, or handle, the physical movement of the goods from Asia to individual stores in the U. S.? Barber’s firm could have a contractor or an agent of theirs at the source where the reduces are been shipped.
This person could be given the mandate to perform quality checks and audit quantities of products been loaded in the containers before loaded on the ship. This helps to identify any shot falls or contractual failures. Upon the arrival of the merchandise in their main warehouse, it will be the functionality of the supply chain or procurement manager to determine what need to be supplied to each store using their current inventory levels and how the turnover rates. 6. The initial prices that potential sources in Asia quote to Barbara are for the blouses at heir (the manufacturers’) shipping dock.
What are all the additional costs between that point and the sales rack in one of the chain’s retail stores? The true costs of sourcing from foreign countries are often not spelled out in full. Most buyers often look at the lower labor and overhead costs instead of doing a detailed analysis of what the actual cost will be. Few costs are below, Part or subassembly cost Freight and duty or customs cost Prep-production support costs Language cost Clearing and forwarding agent 7. You are Barber’s boss. What criteria would you use to evaluate her work and the ark of other buyers under your supervision?
Following evaluation would be used for Barbara and other buyers such as Their ability to share information among each other and are they willing to take the risk. Ability to treat vendors and co-workers with forthrightness and respect Direct and open in expressing differences of opinion Ability to treat vendors and co-workers with forthrightness and respect Able to seek opportunities to streamline processes Openness to new ideas Has a high value for continuous improvement in procuring Able to find win-win solutions with vendors and co-workers