Student First Name: Dawit

Student Last Name: Amare

Student ID Number: 60438204

Instructor Name: Ashok Bhandari

Date: 28 Feb 2024

Transportation and Freight Forwarding (CA-SCTFF)

Assignment #3 – Page 1 of 3

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1..The FOB terms that have been offered to V2 are FOB destination for the speakers and FOB
origin for the receivers. In both cases, the shipping charges are as per Freight Collect terms.

FOB destination: In this term, the responsibility of V2 begins at the moment they collect the
shipment. The control on selecting transportation does not lie with them and the cost incurred
for the shipment will be borne by V2.

FOB origin: In this term the responsibility of transportation, the liability of damages during
transportation, and choosing the transportation means lie with V2. The supplier’s responsibility
ends once the shipment leaves their station. Here V2 will need to bear the cost of freight
charges as well.

2..The speaker delivery has two options. LTL delivery with 200 units for $2485 per week or TL
delivery with 400 units for $2946 twice a month.

Option 1 (Weekly LTL delivery from Tijuana, Mexico): The delivery cost per unit
would be $2,485 / 200 units = $12.43 per unit. The landed cost per unit would be
the product cost ($175) + delivery cost ($12.43) = $187.43 per unit.

Option 2 (Twice per month TL delivery from Tijuana, Mexico): The delivery cost
per unit would be $2,946 / 400 units = $7.37 per unit. The landed cost per unit
would be the product cost ($175) + delivery cost ($7.37) = $182.37 per unit.

3.. Based on the delivery and landed costs per unit, Option 2 is more cost-effective for the
speakers. It has a lower landed cost per unit compared to Option 1.

4..Option 1 (Weekly Ground delivery from Manchester, New Hampshire): The

delivery cost per unit would be $2,169 / 200 units = $10.845 per unit. The landed
cost per unit would be the product cost ($225) + delivery cost ($10.85) = $235.85
per unit.

Option 2 (Twice per week airfreight delivery from Manchester, New Hampshire):
The delivery cost per unit would be $2,411 / 100 units = $24.11 per unit. The
landed cost per unit would be the product cost ($225) + delivery cost ($24.11) =
$249.11 per unit.

5..Even though this is an electronic item with a higher unit cost than most consumer items, I
would still choose the ground transportation mode(option 1) as a delivery mode for the
receivers.

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6..The other supply chain issues and costs that V2 must focus on in making these transportation
decisions are the distribution costs involved, the procurement costs from the new suppliers, the
quality of the raw material from the new supplier, and the turnaround time of supply chain
processes. Also, it must consider the local and international laws governing the transportation of
products and must make sure to comply with everything to avoid any delays or penalties that it
might incur. Also, it must consider the packaging specifications for all the products and lastly, it
must consider and take into account the International Commercial and plan in alignment with it.