SCM 301 Case Study Assignment 1: Analyzing Transportation Choices for MegaShop

1. What is the current price per camera in USD for the Shinko Electric offer? What costs, responsibilities, and risks does MegaShop (the buyer) assume under CPT, Port of Long Beach? 2. What is the current price per camera in USD for the Deep Impex offer? What costs, responsibilities, and risks does MegaShop (the buyer) assume under FAS, Port of Mumbai? 3. What is the current price per camera in USD for the Foto Technika offer? What costs, responsibilities, and risks does MegaShop (the buyer) assume under EXW, Odessa Distribution Center? 4. What other transportation costs and issues must Alex consider to make an effective supplier selection? 5. Which of the three options would you recommend? Why?

1. The current price per camera in USD for the Shinko Electric offer is $593.61. MegaShop under CPT, Port of Long Beach, assumes costs for transportation to the port and bears the risk of loss or damage during transportation. 2. The current price per camera in USD for the Deep Impex offer is $1025.06. MegaShop under FAS, Port of Mumbai, is responsible for loading and transportation costs and bears the risk of loss or damage during the process. 3. The current price per camera in USD for the Foto Technika offer is $200. MegaShop under EXW, Odessa Distribution Center, assumes all costs and risks in transporting the goods. 4. Alex must consider shipping and logistics costs, transit time, supplier reliability, transportation modes, and currency exchange rate fluctuations for effective supplier selection. 5. Based on the information, Option 1 (Shinko Electric) may be recommended due to competitive pricing and a long-standing relationship, but a comprehensive evaluation of all factors is needed.

Analysis of Pricing and Responsibilities

Shinko Electric Offer: The pricing in USD is relatively lower at $593.61 per camera, and MegaShop assumes transportation costs and risks under CPT, simplifying the relationship. Deep Impex Offer: With a higher pricing of $1025.06 per camera in USD, MegaShop has loading and transportation responsibilities under FAS, which adds to the overall costs. Foto Technika Offer: The offer at $200 per camera in USD seems attractive, but MegaShop bears all costs and risks under EXW, which may increase the overall expenses.

Consideration for Effective Supplier Selection

Shipping Costs: Logistics expenses can impact the total cost, so a thorough comparison is essential. Transit Time: Aligning delivery schedules with inventory management and customer demand is crucial for MegaShop's operations. Supplier Reliability: Assessing punctuality and quality of suppliers is vital to avoid disruptions in delivery. Transportation Modes: Analyzing available options and infrastructure can optimize the supply chain and reduce risks. Currency Exchange Rates: Monitoring exchange rate fluctuations is key to managing costs and profitability effectively.

Recommendation

Considering the factors, Option 1 (Shinko Electric) may be the preferred choice due to competitive pricing and a stable relationship. However, a comprehensive evaluation is necessary to make an informed decision.
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