Please answer all parts:

Sound-Around Turntables (SAT) is a regional manufacturer of high-fidelity turntables. It has been in business in Detroit, Michigan since 2008 and has steadily increased sales volume as U.S. sales of vinyl albums re-ignited.

Robert Ritchie, CEO for SAT received an order for 2,500 turntables for Best Buy, a national electronics retailer. Production for this order will begin in late March and the customer order must be delivered on June 1. Since SAT builds to order, Ritchie needs to begin ordering parts from his global supply base soon. A critical part is a 40 watt universal AC/DC motor which powers the turntable.

An important needed component is the turntable motor that is normally purchased from Krikey Electric. The supplier is located in Sydney, Australia. The product is high quality and SAT has worked with Krikey for 7 years. The company makes monthly deliveries of 500 units and the shipments would begin on November 15. However, the company recently raised its prices citing higher material costs due to exchange rate risks.

Last week, Ritchie received a proposal from an Argentinian company that wants to become a supplier to SAT. Maduro Motors would have all units in the order ready at the port of export on March 1 for a single delivery. Ritchie likes the idea of reducing the supplier-to-factory distance. However, he doesnt know much about Maduro or the political environment in Argentina.

The Options

Krikey Motors currently sells the 40W universal AC/DC motor to SAT for 21.5 Australian Dollars (AUD)per unit. Order cycle time is 46 days. Terms are listed as DAT, Chicago Tradeport.

Maduro Motor proposes to sell a similar 40W universal AC/DC motor to SAT for 475 Argentine Pesos (ARS)per unit. Order cycle time is 18 days. Terms are listed as FAS, Port of Mar del Plata.

	Krikey	Maduro
Price Per Unit	21.5 AUD	475 ARS
Estimated Ocean Shipping Cost per unit	5 AUD	65 ARS

Current exchange ratesare asfollows(per $1 US).

Date	Australian Dollar (AUD)	Argentine Peso (ARS)
January 11, 201x	1.402	39.27

Answer the following questions:

1. Evaluate the selling price and related costs per unit offered by each supplier in US dollars. (Are my answers correct here?)

	Krikey	Maduro
Price Per Unit	$15.34	$12.10
Estimated Ocean Shipping Cost per unit	$3.57	$1.66

2. a. What costs, responsibilities, and risks are assumed by the buyer (SAT) and the seller (Krikey Electric) under Incoterms 2010, DAT, Chicago Tradeport?

b. What costs, responsibilities, and risks are assumed by the buyer (SAT) and the seller (Maduro Motor) under Incoterms 2010, FAS, Port of Mar del Plata?

Are my answers correct here?

	a. DAT, Chicago Tradeport	b. FAS, Port of Mar del Plata
Packaging goods for export and loading the container	Krikey	Maduro
Factory to port transportation	Krikey	Maduro
Payment of export duties (if any are due)	Krikey	Maduro
Loading the container on the ship	Krikey	SAT
Paying for the ocean transport (carriage charges)	Krikey	SAT
Paying for the insurance on the international voyage	Krikey	SAT
Paying destination terminal charges for unloading freight	Krikey	SAT
Clearing US Customs (pay import duties & taxes)	SAT	SAT
US transportation to final destination	SAT	SAT

3. What duties must be paid on the turntable motors and who is responsible for paying these duties? Show all figures in U.S. Dollars.

Country of Origin	Purchase price per motor	Rate of Duty Applied	Duty paid per motor	Who pays this duty?
AU = Australia
AR = Argentina

4. Given your responses to Questions 1 thru 3, what is the total known cost per motor that SAT will incur and what other costs will SAT incur?

	Krikey	Maduro
Known Costs from Q1 paid by SAT	$	$
Additional costs from Q2 that SAT will directly incur (though the case does not provide the actual amounts)
Duties from Q3 paid by SAT	$	$
Which supplier do you believe will provide the lowest total cost per unit?	Krikey	Maduro

5. What other costs and factors would you consider during the supplier selection process?

6. Which global supplier would you select? Why?