You received a fax transmittal from Japanese buyers you met in New York. They indicate that they would like to place an order of $5,000$ down bed pillows. The pillow must contain no less than $85$ percent cluster prime white goose down. In order to make the transportation as cost effective as possible, they would like to have pricing for a full ocean container. Before placing the order, they have some questions about the details of the sale.

Their fax has indicated that although they would prefer to pay for the pillows on open account terms, they would consider your suggestions for payment options. They have indicated that they are unwilling to purchase against the documents unless they can first inspect the pillows on their arrival in Japan. They want this right of inspection to find out if the quality is what they had ordered and to look for possible freight damage. They feel strongly about this issue and insist on these conditions, unless you can show them that they can be adequately protected. In addition, they would like to consider the cost of alternative shipping arrangements before they decide whether they want to handle this themselves.

a$)$ Prepare a pro forma invoice giving your buyer several options for shipping the pillows. Consider how they will be packed and transported to the closest or best seaport. What facilities are available for handling containerized cargo or for multimodal transport in your region? Utilizing Incoterms, present a breakdown of the shipping alternatives and costs involved in the transaction.

b$)$ In determining your export price, what other factors must be considered in addition to freight costs? Do you consider additional communication expenses, port fees, trade show expenses, forwarder fees, sales agents, and clerical expenses?

c$)$ Prepare a letter to accompany the pro forma invoice explaining why payment by "cash against documents" would be fair to both parties. What can you propose to address their concerns that the goods shipped will conform to their quality specifications? How will they be protected from marine risks?