a. Identify the Objectives: selling products. b. Know the customer: ABC Trading Co., Ltd. (Japan). c. Preparation of issues related: ● Product: - Commodity: Robusta Coffee. - Quantity: 1000 tons. - Quality: As sample agreed by two parties. ● Selling price: - Selling price: 1,650 USD/MT FOB Saigon port. - Buying price: 32,000,000 VND/ton (includes packaging fee and inland freight to Saigon port). ● Transport: - Term of sales: FOB, Saigon Port. - Time of delivery: Before December 10th, 2021. ● Payment: L/C time draft, 03 months after receiving goods. d. Profit and Loss: ● Total revenue: 1,650 USD/MT x 1,000 = 1,650,000 USD ● Total cost: Buying price: 32,000,000 VND/MT Financial fee (interest rate): 32,000,000 VND/T x 3 x 0,7% = 672,000 VND Total cost per unit: 32,000,000 + 672,000 = 32,672,000VND = 1,402.3 USD Total cost: 32,672,000 x 1,000 = 32,672,000,000 VND = 1,402,231.76 USD ● Total profit: Total profit per unit: 1,650 - 1,402.3 = 247.7USD/ MT Total profit: 247.7 x 1,000 = 247,700 USD ● Exchange rate of export (Re): Re = Total cost per unit (VND)/Total revenue per unit (USD) = 32,672,000VND/1,650 USD = 19,801 VND/USD < Rc = 23,300 VND 2. The buyer proposes the price lower than USD 1,600/MT FOB Saigon port, and L/C 06 months after receiving goods . How about ZOPA in this case? How to create value to exchange in this deal? Total cost: Total cost per unit: Buying price: 32,000,000 VND/MT Financial Fee (Interest rate 0,7%/month) = 32,000,000 x 0,7%x 6 = 1,344,000 VND => Total cost per unit = 32,000,000 + 1,344,000 = 33,344,000 VND= 1,431.07 USD => Total cost = 1,431.07 x 1000 = 1,431,070 USD. The seller sells Robusta coffee for a minimum price of $ 1431.07/MT, while buyers are willing to buy for lower than $ 1600 / MT. So, Zone of Possible Agreement (ZOPA) in this case is $1431,07 - $1600.
How to create value to exchange in this deal?
Discount: Discount for buyers if buyers buy in large quantity, which can increase sales and profits, buyers can buy at a lower price. Maximum discount of 10,56%:(1,600-1,431.07) / 1,600 = 10.56% Delivery time: Earlier time of delivery Payment period: If buyers pay in advance, pay at sight or pay early, the seller will accept a certain discount. If the buyer accepts the higher price offered by the seller, the seller may accept a longer payment period 3. As the seller, prepare an export proposal to get a profit of at least USD120/MT.
a. Identify the Objectives:
- Get profit more 120/MT
b. Know the customer Partner: ABC Trading Co., Ltd. (Japan)
c. Prepare key point Product: - Commodity: Robusta Coffee - Quantity: 1,000 tons - Quality: As sample agreed by two parties - Price: ● Financial fee (interest rate): 32,000,000 x 3 x 0,7% = 672,000 VND ● Buying price: 32,000,000 VND/ton (includes packaging fee and inland freight to Saigon port) => Total cost per unit: 32,000,000 + 672,000 = 32,672,000VND = 1,402.3 USD ● So to get the profit at least 120 USD/ MT => Selling price: 1,402.3 + 120 = 1,522.3 USD/ MT - Term of sales: FOB, Saigon Port - Transport: ● Mode of transport: vessel ● Time of delivery: Before 20 December 2019 ● Term of delivery: FOB, BNEX has to deliver coffee to Saigon port and be responsible for the risks of cargos until the coffee is on vessel board at Saigon port. - Port of loading: Saigon port - Payment: ● Method of payment: L/C time draft, 03 months after receiving goods ● Terms of payment: Deferred Payment.
CLC - Tài chính quốc tế - (2-1920) .1 - PGS.TS Mai Thu Hiền - A STUDY ON LATIN AMERICAN DEBT CRISIS IN THE 1980S AND LESSON FOR VIETNAM IN PUBLIC DEBT MANAGEMENT PDF