Scenario: It's October 25, 2023, and you are working as a buyer for the Team Shop...
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↑ Scenario: It's October 25, 2023, and you are working as a buyer for the Team Shop at Little Caesar's Arena. The Detroit Red Wings are off to a fast start for the NHL season and demand for team apparel is skyrocketing. Your supervisor has asked you to analyze and recommend external sources of moisture-wicking polyester t-shirts. You need to source them fast as the t-shirts are expected to be big sellers for the Christmas holiday! Harmonized Tariffs - Moving good from global suppliers to the U.S. market Your search generates three potential sources for the 500 dozen units of product needed. Now, figure out which one is the best financial deal for your company. Step 1: Get all your information in the required measures and calculate key costs per dozen in US $ Supplier Location Purchase Cost Purchase per Dozen Cost per Dozen Nike Mexico (MX) 4909 MXN Adidas Germany (DE)225 EUR $ Youngone Korea (KR) 271,919 KRW S Nike Mexico MX $ Adidas Germany DE $ Youngone Korea KR s Nike $ Adidas s Step 2: Calculate the duties for each option in US $ Supplier Location Country Code Purchase Rate of Duty Duty Cost per Applied Dozen Cost per Dozen s IS Module 12 Assignment Is Step 3: Calculate the total cost for each option in US $ Supplier Purchase Duty Cost per Cost per Dozen Dozen $ $ Transport Cost per Dozen Transport Cost Transport per Dozen Cost per Dozen 370 MXN $ 33 EUR s 56,195 KRW S $ |$ Exchange Rate (per $1 US) Landed Cost per Dozen Total Landed Cost per (Purchase + Duty + Shipment Transport) (Landed Cost x 500) $ |$ 18.1 MXN 0.94 EUR 1,343.6 KRW Nike s Adidas $ Youngone S Cost per Dozen s |$ IS Dozen S $ Cost per Dozen 15 $ 0 Step 4: Use your information to answer the following: (Purchase + Dury Transport) b. Which supplier provides the lowest landed cost? # What risks and challenges must be considered in this supplier selection decision? # e. Why did you select this supplier? c. Should you recommend this supplier to your supervisor? d. Which supplier do you recommend to your supervisor? Harmonized Tariff Schedule- Chapter 61 $ Shipment (Landed Cost x 500) TITERE Heading Subheading Bu 6109 6109.10.00 6109.90 6109.90.10 6109.90 6109.90.10 60 65 70 Harmonized Tariff Schedule of the United States (2016) Supplement-1 Annotated for Statistical Reporting Purposes Article Description T-shirts, singlets, tank tops and similar garments, knitted or crocheted: Of cotton.... Of other textile materials: Of man-made fibers..... Women's (339) Girls' (339) Other (339). Of other textile materials: Of man-made fibers...... Quantity doz. kg doz. ka doz kg 16.5% $ 32% Rates of Duty Free (AU, BH, CA. 90% CL, CO, IL, JO, MA, MX, OM, P. PA, PE, SG) 8.2% (KR) Free (AU, BH, CA, 90% CL, CO, IL, JO, MA, MX, OM, P. PA, PE, SG) 10% (KR) Free (AU, BH, CA, 90% CL, CO, IL, JO, MA, MX, OM, P, PA, PE, SG) 16% (KR) 61-49 ↑ Scenario: It's October 25, 2023, and you are working as a buyer for the Team Shop at Little Caesar's Arena. The Detroit Red Wings are off to a fast start for the NHL season and demand for team apparel is skyrocketing. Your supervisor has asked you to analyze and recommend external sources of moisture-wicking polyester t-shirts. You need to source them fast as the t-shirts are expected to be big sellers for the Christmas holiday! Harmonized Tariffs - Moving good from global suppliers to the U.S. market Your search generates three potential sources for the 500 dozen units of product needed. Now, figure out which one is the best financial deal for your company. Step 1: Get all your information in the required measures and calculate key costs per dozen in US $ Supplier Location Purchase Cost Purchase per Dozen Cost per Dozen Nike Mexico (MX) 4909 MXN Adidas Germany (DE)225 EUR $ Youngone Korea (KR) 271,919 KRW S Nike Mexico MX $ Adidas Germany DE $ Youngone Korea KR s Nike $ Adidas s Step 2: Calculate the duties for each option in US $ Supplier Location Country Code Purchase Rate of Duty Duty Cost per Applied Dozen Cost per Dozen s IS Module 12 Assignment Is Step 3: Calculate the total cost for each option in US $ Supplier Purchase Duty Cost per Cost per Dozen Dozen $ $ Transport Cost per Dozen Transport Cost Transport per Dozen Cost per Dozen 370 MXN $ 33 EUR s 56,195 KRW S $ |$ Exchange Rate (per $1 US) Landed Cost per Dozen Total Landed Cost per (Purchase + Duty + Shipment Transport) (Landed Cost x 500) $ |$ 18.1 MXN 0.94 EUR 1,343.6 KRW Nike s Adidas $ Youngone S Cost per Dozen s |$ IS Dozen S $ Cost per Dozen 15 $ 0 Step 4: Use your information to answer the following: (Purchase + Dury Transport) b. Which supplier provides the lowest landed cost? # What risks and challenges must be considered in this supplier selection decision? # e. Why did you select this supplier? c. Should you recommend this supplier to your supervisor? d. Which supplier do you recommend to your supervisor? Harmonized Tariff Schedule- Chapter 61 $ Shipment (Landed Cost x 500) TITERE Heading Subheading Bu 6109 6109.10.00 6109.90 6109.90.10 6109.90 6109.90.10 60 65 70 Harmonized Tariff Schedule of the United States (2016) Supplement-1 Annotated for Statistical Reporting Purposes Article Description T-shirts, singlets, tank tops and similar garments, knitted or crocheted: Of cotton.... Of other textile materials: Of man-made fibers..... Women's (339) Girls' (339) Other (339). Of other textile materials: Of man-made fibers...... Quantity doz. kg doz. ka doz kg 16.5% $ 32% Rates of Duty Free (AU, BH, CA. 90% CL, CO, IL, JO, MA, MX, OM, P. PA, PE, SG) 8.2% (KR) Free (AU, BH, CA, 90% CL, CO, IL, JO, MA, MX, OM, P. PA, PE, SG) 10% (KR) Free (AU, BH, CA, 90% CL, CO, IL, JO, MA, MX, OM, P, PA, PE, SG) 16% (KR) 61-49
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