Question

• Simon is comparing prices for an order for 297 bicycles from three (3) different Australian suppliers. (The 297 bicycles will fill a standard 20-foot container.) The problem is that the three (3) firms have not quoted prices the same way. Firm A quoted EXW (Ex Works) Murray Bridge, Australia at $122.16 each. Firm B quoted FOB (Free On Board) Port Adelaide, Australia at $128.02 each. Firm C quoted DDP (Delivery Duty Paid) Port of Vancouver, Canada at $148.01 each. He is trying to compare the three prices and figure out what he is getting under each of the three terms. Hauling the container from the factory in Murray Bridge, Australia to the container port at Port Adelaide, Australia, and getting it loaded onto the ship will cost $707.00. (The current exchange rate is $0.92 . At the moment the CAD is worth more than the AUD.) Ocean freight from Port Adelaide, Australia to the Port of Vancouver, Canada is $1,020.00 per 20-foot container. For a shipment of this value, insurance is $202.00. The current duty for bicycles imported to Canada from Australia is 12.94% . (Note: For EXW and FOB terms, the duty is based on the CIF price of the goods. This means the cost of the goods, plus the cost of haulage if required, plus the cost of insurance if required, plus the cost of freight if required.) Which supplier offers the best deal?

Answer 1