Screens Plus $($SP$)$ is a manufacturer of high$-$end computer monitors. The company assembles Ultra HD computer monitors in Calgary, Alberta and sells them online and through specialty electronics stores. The most popular model retails for $$4,995$ and SP bundles the monitor with high fidelity audio components that are purchased from external suppliers. Two components that are currently bundled are a set of external speakers and a package of specialized power supplies and HDMI connecting cables. Due to ongoing delivery challenges with their Pacific Rim suppliers and carriers, SP has decided to buy from suppliers in closer proximity to Calgary. The speakers will be supplied by an electronics company with operations in Juarez, Mexico and the connecting cables will be purchased from a manufacturer in San Francisco, California. The purchase contracts have been negotiated in principle. The speaker supplier sells its products FOB Destination, Freight Collect and Allowed. The receiver supplier only sells its products FOB Origin, Freight Collect. The remaining issue for the SP transportation director is to evaluate the delivery options that her analyst recommended for each product and make a decision. Relevant information is provided in the following table:

Manufactured Jaurez, Mexico San Francisco, California

SP purchase price $$175$ CAD per set $$225$ CAD per unit

Weight $28$ pounds $5$ pounds

Dimensions $30$ L x $18$ W x $18$ H $18$ L x $8$ W x $4$ H

Characteristics Sturdy, bulky, not easily damaged Compact, vibration sensitive$,$ theft risk

Freight Terms FOB destination, freight collect and allowed FOB Origin, Freight Collect

Option $1$ Weekly LTL delivery $200$ units $$2,485$ CAD Cost per delivery Weekly ground delivery $200$ units $$2,169$ CAD Cost per delivery

Option $2$ Twice per month TL delivery $400$ units $$2,946$ CAD Cost per delivery Twice per month TL delivery $400$ units $$2,946$ CAD Cost per delivery

Short Questions

$1.$What responsibilities, control, and costs does SP bear under each of the FOB terms offered?

$2.$What is the delivery cost and landed cost per unit for each speaker delivery option?

$3.$Which delivery option do you recommend for the speakers?

$4.$What is the delivery cost and landed cost per unit for each receiver delivery option?

$5.$Which delivery option do you recommend for the receivers?

$6.$What other supply chain issues and costs must SP take into consideration when making these transportation decisions?

Broad Questions

$1.$Describe the potential social impacts that accompany both choices and recommend strategies to manage these for each supply location.

$2.$ Describe the areas of major risk that pertain to this logistical plan if the Mexican supplier was to be used and propose strategies to manage these.

$3.$ Describe the elements of compliance that apply to importing the product assuming the US suppler was to be used.

Reading Materials:

Incoterm

Maquiladora Video