Your company has been contacted by a new prospective customer in Oruro, Bolivia.

The buyer in Bolivia would like you to quote various prices for 80 bulk units of your product as their company is considering different terms and options at this time.

Routing Information:

1. The goods would ship from your warehouse in Edmonton, Alberta by Speedy Gonzales Trucking to the Trucking Terminal in Edmonton.
2. From the Trucking Terminal in Edmonton to the Port of Vancouver, where they will be loaded on the ship Sea Ranger for ocean voyage to the Port of Arica, Chile.
3. From the Port of Arica, the goods will go by rail to La Paz (Bolivia) Intermodal Terminal, crossing at the Visviri (Chile) / Charana (Bolivia) border.
4. From La Paz they will be brought by Pepe Trucking to Oruro, the final destination.
5. Note: in all scenarios the buyer requires the seller to package for export

Requested Prices/Options:

1. The buyer wants you to deliver the goods insured to the Port of Arica. The buyer will assume the risk as soon as the goods have been loaded on the vessel Sea Ranger in Vancouver.

1. The buyer wants the goods delivered to a bonded warehouse in Bolivia, where the buyer will assume risk for the goods, clear Customs and pay duties and taxes.

1. The buyer wants the goods loaded onto the ship Sea Ranger in Vancouver, where the buyer will accept all risks for the goods and pay for all transportation costs from Vancouver to Oruro.

1. The buyer wants you to deliver the goods to the Trucking Terminal in Edmonton. The buyer will assume the risk as soon as the goods have been delivered to that location.

1. The buyer wants the goods delivered not insured to La Paz Intermodal Terminal, but the buyer will assume risk for them once they are given to Speedy Gonzales Trucking Terminal in Edmonton.

Using the transaction costs on the following page and your costing chart, for each of the five scenarios above determine the correct incoterm, location and selling price.

Answers:

Incoterm Location Total Price

a) ____________ __________________________________ $ ___________________

b) ____________ __________________________________ $___________________

c) ____________ __________________________________ $___________________

d) ____________ __________________________________ $ ___________________

e) ____________ __________________________________ $ ___________________

Transaction costs in Canadian dollars:

Product Cost

$ 1100.00 / Unit

Import Duties & Taxes

$ 24.00 / Unit

Trucking from La Paz Intermodal Terminal to Oruro $ 14.00 / Unit

Ocean Freight

$ 50.00 / Unit

Export Packaging

$ 5.00 / Unit

Rail from the Port of Arica to La Paz Intermodal Terminal

$ 10.00 / Unit

Marine Insurance

$ 4.20 / Unit

Trucking from Seller's Warehouse to Trucking Terminal Edmonton

$ 11.00 / Unit

Export Customs Clearance

$ 1.50 / Unit

Trucking Terminal Edmonton to the Port of Vancouver

$ 15.00 / Unit