Cass Study

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To student:
Instructions:
1. Read the case study

2. Answer the following questions:
: What factors should Pam consider in making a decision to source globally?| : If you were a purchasing consultant hired by Pam, which cost effective method can you advice her to use in sourcing Dried floral globally.| : As a procurement officer what lessons can be learnt from this case study and what actions would you put in place? | : Why is Pam able to save 40 percent by buying offshore? What is the difference about the overseas transaction versus the local transaction?| : What are the issues that Pam may encounter with global sourcing that she is not expecting currently? |

Note in each of the question you are suppose to explain, discuss and motivate your answer, try to be resourceful Assignment should be done in groups of 5. No individual assignment will be considered Due date 10 October 2012

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Question 1 What factors should Pam consider in making a decision to source globally?| Pg. 4-5| Question 2: If you were a purchasing consultant hired by Pam, which cost effective method can you advice her to use in sourcing Dried floral globally.| Pg. 6| Question 3: As a procurement officer what lessons can be learnt from this case study and what actions would you put in place? | Pg. 7| Question 4: Why is Pam able to save 40 percent by buying offshore? What is the difference about the overseas transaction versus the local transaction?| Pg. 8| Question 5: What are the issues that Pam may encounter with global sourcing that she is not expecting currently? | Pg. 9-10| Conclusion| Pg. |

References| Pg.|

1. What factors should Pam consider in making a decision to source globally? 1 Total landed cost.
Total landed cost include factors like transportation, customs and duties, brokerage services (both at origin and destination), banking fees, financing and insurance. It should also be mentioned that there could be additional, unexpected costs. For example; if the customs decides to examine the freight, you should add in charges for the examination and local coordination charges.

2 Product quality.
The quality of the product needs to be defined so that the supplier and buyer understand and are in agreement. The quality of the product has consequence over and above the unit cost. Poor quality or defective products affects everything downstream and returns drain the business and taking up resources. Defective product may need to be sold at a discount or written off as a loss, each of which affects the bottom line.

3 Logistics capability.
The type of transportation that is available, domestically and internationally. The goods need to be transported to an airport or seaport for transport. Investigate if there is a reliable transportation infrastructure in the country? Once the freight is ready for international transport, is there space or lift available? Seasonal fluctuations and weather should be taken into consideration.

4 Location.
The location of a country may make it a more attractive source for your product. Location is very important and should not be taken lightly. Consideration should be given to larges importer countries like Mexico and Canada. The country location also benefits such as doing business in the same, or close, time zones.

5 Trade regulations.
Governmental regulations can enhance or detract from the ease of doing business with a given origin. Before any sourcing decision is made, it is imperative that all trade incentives or restrictions are evaluated carefully.

6 Finances.
The financial aspect should be evaluated in addition to looking at the actual cost of goods. Factors that should be evaluated are; terms and conditions that could be negotiated with suppliers, evaluate the risk with the manufacturer and the insurance required to source from a specific supplier. Look at how this...
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