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FERRO INDUSTRIES — EXPORTING CHALLENGE IN A SMALL FIRM
Dr. Justin Paul, Dr. Parul Gupta and Dr. Shruti Gupta wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
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Yusuf had placed a large order for roll-forming machines from Ferro in March 2010, but he had been unwilling to pay for the consignment in advance. Ferro exported the machines from its New Delhi office.
The machines were sent from the Ferro factory to the shipping line on May 6, 2010. The container took one month to reach the port of Riyadh, Saudi Arabia. Yusuf had agreed to pay before he collected the machines from Riyadh, but even after Yusuf received the bill of lading (B/L) from Ferro, the company still did not have the desired payment. Consequently, the Sharmas sent instructions to their carrier, World
Shipping Company, not to release the machines until the promised amount was paid. The situation was complicated by the fact that Yusuf was actually a middleman for a third party in Saudi Arabia (the real buyer of the machines) and was therefore dependant on this party for payment. Further, holding back the consignment meant increased demurrages (charges for delays of cargo ships) for Ferro. Thus, in order to minimize financial loss and to avoid offending and losing a significant, regular client, Garima Sharma had decided to release the machines to Yusuf before receiving payment — but now she worried that she should not have done so.
BACKGROUND OF THE COMPANY
Ferro Industries entered the steel industry in 1995 as a small firm and developed into a highly successful company in many
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account of his travels in the East Indies in 1599. He may have wrote this to alert his authorities
i. With regards to suppliers delivering goods, they simply sent the goods without any prior notification. This led to a variable rate of arrival of stock in the ware houses.
This agreement made and entered into this date October 23, 2015, by and between Machines, Inc. of Austin, Texas, and Widgets, Inc. of Detroit. It was designed for both parties to understand terms and condition of their trading. This sale contract was developed by Uniform Commercial Code, which is government rules regarding businesses or companies. According to Raina article, “the terms and conditions in import contracts outline the rights and obligations of the importer and the foreign supplier in carrying out the transaction (1990, sec.1). This contract regards for the purchase of the goods described below:
The high demand for the company products resulted in difficulty filling orders for its cus- tomers. Because of the rapid inventory turnover in the retail grocery trade, customers demand delivery within one week with a maximum allowance of 10 days. It generally takes four to five days lead time for Prairie Winds Pasta to put a specific product into production and an average of 4 days to ship the product to the customer. The 30 different varieties of pasta and rapid inventory turnover resulted in high levels of non-production time required to switch production from one type of pasta to another. Prairie Winds was experiencing difficulties satisfying existing customers on a timely basis. Several of the large grocery store chains had indicated that they might switch sup- pliers if they could not get a reliable shipment of goods.
The completed product is stored in a storage room waiting for customer sales. From the storeroom, the customers can pick up their fans from the manufacture. Riordan’s transportation department uses a less expensive Chinese shipping company to ship locally. Logistic shipping internationally is similar to the method within the United Sates. In the event of forecasting shortage issues, Riordan integrated inventory methods that show opportunities to reduce costs and enhance services. The company maintains extra stock of polymer’s but not the electric motors. Nevertheless, the motor supplier maintains extra stock at their facility reducing the overhead for Riordan.
The primary objectives of the buyer (Great Western Bank) are to get a refund for the loss. Right now the bank has paid for the machines and will never get to use it since they are all damaged. So it is important for the bank to get refund for the money which they paid. Filing a claim is also required by the bank to get back the money or the machines.
Second, an article that accompanying the fax indicated 400 laborers at the Yin Motor Company are on strike. This strike could possibly affect the financial stability of the Yin Motor Company. Third, “while this company attempts to maintain adequate quantities of electric motors in stock to meet all its order requirements, its on-time deliveries over the past year have averaged only 93%” (Riordan Mgf. Operations - Supply Chain (Hangzhou, China), 2014).
Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written
He had begun working on a simulator he wanted me to promote and sell in the UAE and had asked me to ask the UAE Company regarding that.
Background of Issue ……………………………………… . . . . . . . . . . . . . . . . . . . . . . . 3
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Applying the new policy to rationalise BAL’s supplier base over six years, BAL achieved direct cost savings by decrease the base of supplier, and the next target was 600. In order to verify whether BAL’s suppliers were authorised and qualified to produce the necessary parts, BAL needed to ensure any “flyaway” items purchased or manufactured had complete traceability.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of
1. Is the capital investment proposal described in Exhibit 3 and attractive one for Quality Metal Service Center?