The Tainan Glass Manufacturing Company of Taiwan (the name of the company is disguised) produces large glass


The Tainan Glass Manufacturing Company of Taiwan (the name of the company is disguised) produces large glass sheets for windows, display cases, and industrial uses. It is one of two manufacturers in Taiwan.

Odd-sized pieces left over from cutting sheets to order are made into glass louvers for use in jalousies. Jalousies, which are windows or doors made of slats that can be rotated open to allow air to flow through or closed to keep wind and rain out, are very popular in a number of countries with hot climates.

Unless made into louvers, the odd-sized pieces are scrap of no value. In effect, this makes the raw material free, and the only additional cost of making the louvers is the cost of cutting to exact size and polishing the edges.
When demand for louvers is exceptionally high, however, full-size sheets are sometimes cut into louvers. This requires the use of full-cost raw material as well as labor, and the sales prices of the louvers normally reflect total cost for glass as well as labor.
For a number of years Tainan’s major customers for the louvered glass had been several importers in Nigeria.
However, three years ago economic problems in that African country had made it impossible for importers to arrange for foreign exchange to pay for the glass imports, unless the importers had special arrangements with the Nigerian government. None of the glass importers had been successful in making such arrangements, so Tainan has had to suspend exports to Nigeria. Unfortunately, except for some small buyers in the state of Hawaii in the United States, no other potential customers appeared.........


1. Why did the Nigerian company arrange for payment from a Hong Kong bank rather than a Nigerian bank?

2. In what ways may the Nigerian company have obtained hard currency?

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International Marketing And Export Management

ISBN: 9781292016924

8th Edition

Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr

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