Imagine that you are the Head of the Procurement Department in a Manufacturing and Supply Chain Company and you have 2 incoming shipments every other month that costs over 3.5M each. Now, these transactions have been approved already but the President of the company wants you to provide a transaction strategy in financing these shipments as the company's earning a gross monthly rate of 10M. The monthly operational costs of the company is roughly at 30%. The terms of Sales with the supplier is signed of the be 5/15, n/60. In your capacity as the Head of the Procurement, are you going to pay for the shipment within the Cash Discount period? Why? State your rationale. How many transactions are you going to finance within the Discount period? Are you going to max out the company funds to finance the shipment? What are the pros and cons of your choices? What are the pros and cons of paying within the Cash Discount Period?

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ANSWER In my capacity as the Head of Procurement I am going to pay for the shipment within the Cash ... View the full answer