Question

4.

List the five modes of transportation and for each mode, provide a brief description of the kinds / types of cargo that are typically transported via that mode. 

5.

(A) What is a Foreign Trade Zone (FTZ)? 

(B) What types of operations can be performed in an FTZ? 

6.

(A) What is Customer Lifetime Value? 

(B) Why is it important?

Answer 1

4.

Transportation mode is that by which we can transfer the material or something else from one place to another. There are five modes of transportation which is listed below:

1. Road transportation: It is most common of all modes of transportation. It has several benefits:
   1. Cost effectiveness.
   2. Fast and scheduled delivery
   3. It is flexible service.
   4. It compete door-to-door service.
2. Rail transportation: It is also an effective mode of transportation because it burns less fuel per ton-mile than road vehicle and it helps to life more material as compare to road vehicles. It has several benefits:
   1. Railroads are most efficient from land transportation because it can hold the material equivalent to 300 trucks.
   2. Rail roads have strong safety records.
3. Air transportation: It is also the type of transportation but it is very costly as compare to road and rail. But it has also several benefits:
   1. It is help to transfer material very quickly.
   2. Required less documentation.
   3. Reliable arrival and departures
4. Ocean transportation: It is also the transportation type and it is very cheaper for shipping the goods as compare to other modes, but the drawback is longer transit time. For example the (wheat, maize, soya, coal, iron ore, etc.) are the cargo for this mode. It has some key benefits:
   1. Cheaper than other.
   2. Most environment friendly
   3. Multiple carrier option
5. Pipeline transportation: It is the mode of transportation of goods or material through the pipe. For example if we want to send some liquid raw material than it is very effective mode of transport. It has some key benefits:
   1. Material is safe in this mode.
   2. Energy efficient
   3. Helps to moving large quantity over long distance.

So there are numbers of option for transporting the goods and material. Each mode has its own advantages and disadvantages. It’s totally up to you which type of mode you have preferred as per your requirements

5.

(a) Foreign Trade Zone (FTZ): This is also called as Free Trade Zone. These are secured zones, and would be under the control of Customs and Border Protection (CBP) security of the government of the country importing/exporting. This FTZ facilitate the importer for importing the raw material, components ...etc without paying any customs duties, VAT. And these FTZ are located nearest to the port of entry or discharge of the country. Tax rebates are available for exporting as well as for importing from FTZ. As long as the goods are in FTZ, no duties are collected.

(b) Types of Operations performed in an FTZ:

1. Manufacturing/Assembling/Reworking: FTZ allows to manufacture the goods with the imported raw material, assembling the parts, reworking or repairing...etc.
2. Stocking/ storage: In FTZ, warehouse facility is available for the imported goods including raw material for a certain period. This is a great advantageous benefit for the manufacturer/exporter/trader.
3. Facilities for Trader: FTZ is a place for the traders for dismantling, inspection, assembling, packing, marking, labeling for their onward activity.
4. Exhibitions: As the FTZ is a free trading zone, it allows the manufacturers/exporters/traders to conduct international trade fares / Exhibitions to promote their new products to develop the new customers/ buyers. Goods/ new parts/ materials ..etc can be brought from all around the world to exhibit to the potential buyers.
5. Main advantage: FTZ is a one of the solutions for the importing/re-exporting for manufacturers/ Business development for existing investors and traders.

6.

(a) Customer Lifetime Value is the value or profit contributed by a customer to the business throughout the lifetime. It helps to understand how much a customer is ready to spend and decide how much the company can spend while serving the customer. Customer Lifetime Value is very important to determine the success of the business and the future growth. The important business decisions including financial and expansion decisions are made by analyzing Customer Lifetime Value.

(b) The customer support is very much essential for the business growth and the customer satisfaction is also directly related with Customer Lifetime Value. The product development ideas and marketing decisions also depends upon the customer Lifetime Value and the sales and revenue can be improved only by adopting strategies that would improve customer loyalty retaining the existing customers. It becomes more significant as acquiring new customers can be more costly for the company and the business can sustain only by retaining the existing customers.