Renault Case

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Please prepare the case “Renault’s Logan Car: Managing Customs Duties for a Global Product” to be discussed in the next class. The case report is due at the beginning of the next class. Please keep separate copies for purpose of participating in class discussion. Study Questions: (1) What are the complexities involved in factoring out the effect of customs and duties in designing the supply network of Logan (i.e., where to build the CKD parts and CBU, and what markets to serve from what sites)? (2) In general, what are the quantifiable and non-quantifiable factors that one should consider in designing a supply network? (3) For Logan, what new opportunities were created by Romania entering the European Union in 2007? (4) One…show more content…
This is a factor that cannot be measured until the product (car) is launched and unexpected success might add pressure on the existing supply chains for huge supplies. Similarly a huge supply chain network built in anticipation of the success of the product might be a burden if there does not exist enough demand. c. Political unrest between nations always adds to the pressure of trade. This would be a major factor especially when we build a supply chain that is well woven between two nations with a bit of a political unrest. d. Countries and Unions- A country joining a union, say like the European Union, would allow for a major overhaul of the existing tariffs and custom duties between the existing nations of the union and the newly joined country. We can never be sure of this scenario as this involves a lot of negotiations and agreement to applicable laws, but this does have a major impact on the costs and tariffs. The positives would be decrease in tax rates and import/export duties while the negatives would be increased competition. e. Unexpected variations in the demand for a particular model should be countered to build an efficient supply network. Demand forecast would be a powerful tool that can be applied in such a scenario but cannot be quantified accurately. Quantifiable factors: a. Economic growth of countries is a factor that can be measured and one that has impact on a vast range of parameters, especially on consumption
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