Question

3. The key sourcing and procurement considerations made by the management team as well as the factors that contributed to the preferred modes/methods of transport for your shipment(s) (20 marks)

Answer 1

There are two ways of transportation from S to C – by sea, by air

Few considerations are to be made as below:

#) Urgency: if the chocolates are to be delivered in urgency, the air flight option is to be chosen as this is the fastest.

#) Payment: who will pay the delivery cost? If it is paid by the buyer then the air flight option could be chosen; otherwise, sea vessel option is better.

#) Specification: if the buyer specifies any particular mode of transportation, then that should be followed.

#) Availability: sometimes the mode of transportation depends on its availability – such as in Christmas times, flight booking is very difficult.

Few factors are as below:

#) Earnings: this is the most important factor. An exporter should not lose earning by way of an expensive delivery schedule. Therefore, flight transportation could only be chosen if it is paid by the importer.

#) Risk: sea transportation is risky at the time of rainy season. Therefore, the amount of insurance on shipment would be a deciding factor.

#) Contract: before the deal is on, there would be a contract between the parties. The way of delivery must be clearly mentioned there.