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Topics 1 & 2

Topic 1

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Introduction to international logistics

Topic 2

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Supply Chain Management and Customer Service

Building Meaning

Reflection
Reflect based on the following questions:

What is the difference between logistics and supply chain management? What do you
consider to be the key to carrying them out successfully?

Demonstration

As a team, select how you will demonstrate what you have learned. The demonstration of the
activity must include the process, the conceptual basis or rationale, and the result.

Total
  Areas points
100

Process
70
Evaluation criteria

1. Answers to questions about the case.

Analysis of the different options of foreign providers under

2.
the conditions described in the case.

Essay that elaborates on the influence of different factors

3. when making decisions and on the impact foreign providers
have on the industry and against competitors.

Rationale
The students must submit a document that supports their work 15
(conceptual learning).

Result
Original and creative presentations, video recordings, podcasts, 15
proposals, among others.

Use your imagination, be creative!

Activity 1

Activity 1. Which is better? Local or global providers?

Description
Students will identify the elements that have an influence when deciding whether to use a
global provider or a local alternative and determine which is the best option by using cost-
benefit criteria.

Objective
To analyze different options of global providers versus local providers to determine which will
be the company’s best choice, using cost-benefit criteria.

Requirements
A word processor per team, a case to analyze, and a calculator.

Instructions
Part 1

1. First, carefully read the case and answer the following questions, click here to download
it.
a. What is international logistics? Write a definition in your own words.
b. Which do you think are the activities that support international logistics? Consider
that these are the activities that allow the logistics system to work. Elaborate in your
own words.
c. What kinds of international transportation do you know?
d. What do you think are the economic benefits obtained by using foreign providers
versus local providers? Consider marketing aspects such as logistics, materials, cost,
and labor.
e. What opportunities do you think logistics can bring in terms of increasing efficiency
by means of optimizing costs and strengthening the market?
2. Mention two examples of companies that you consider have good international logistics
and explain why.
3. Analyze the following case and answer the question:

If a company wants to obtain the same profits it attained before, when

it sold the product for 550 MXN:

What would be the maximum quote cost for each of the three options in
order to consider it a profitable business for the company? Indicate the
cost in each country’s currency, using USD for China’s instance.

Part 2

4. In pairs, analyze the following situation:

Mr. Carlon finally received the provider quotes he requested. The prices for each provider are:

China 30.00 USD

Italy 24.00 EUR

United States of America 34.00 USD

a. Which of the foreign provider options fulfills the profit per piece goal set by AF1?
b. Among the feasible options, which is the most profitable? Consider the profit goal in
this case.

Before making a decision, Mr. Carlon looked at the current exchange rates in the newspaper.
Consider that exchange rates are different:

MXN/USD exchange rate: 12.25

MXN/EUR exchange rate: 16.10

c. Do you think this information will change the decision to be made?

Mr. Carlon was not familiar with imports, since AF1 markets Mexican products only, and he
forgot to add the calculation on tariffs to his decision. He obtained the following information:

Tariff on hubcaps of Chinese origin: 15% over customs value.

Tariff on hubcaps of European origin: 5% over customs value.

Tariff on hubcaps of American origin: 0% over customs value.

Customs value is calculated considering the product cost plus the sum of all costs incurred
until the material gets to the customs office of the country that will import it.

d. With this new information, what do you think will be the final decision for the most
profitable option? Explain how you reached this conclusion.
e. If you compare the calculation above to the cost of acquisition with a local provider,
which of the foreign provider options would have a lower product cost, without
considering the profit per piece that AF1 wants to obtain?

Part 3

5. In class, now that you have elaborated on the options the company has and on the
influence that different factors have on decision-making, discuss the key elements that
help a company make the right decisions and change conditions that may determine the
selection of a different alternative.
6. Conclude about the importance of implementing foreign providers within companies and
the impact it has on the industry and against competitors.

Note: Consider that your activity must be documented (process) and substantiated.

Evaluation criteria
1. Answers to questions about the case.
2. Analysis of the different options of foreign providers under the conditions described in
the case.
3. Essay that elaborates on the influence of different factors when making decisions and on
the impact foreign providers have on the industry and against competitors.

Deliverable(s)
A document with answers to the questions and the conclusions reached.

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