Number of pieces which might get realistically fit within the container

Reflective Assignment

Contents

Reflective Assessment 3

Reference. 6

Appendix: 7

Reflective Assessment

1. Number of pieces which might get realistically fit within the container:

The container has a filling capacity of getting filled upto 80% of total which is 20ft x 8 ft x 8ft. It means that there can be total of 90 carton get filled with EATES calculators which may come into containers. As it has been told that the capacity is about 80% only so the number of cartons which might be filled would be 90*80%= 72 and each of the carton carries around 70 EATES calculators which makes the total number of calculators of near about 72*70= 5040 pieces of calculators. There are three different locations in Canada which might sell the EATES calculator in three different prices (See table 1 in appendix).

As it can be seen that the average price is of 42, and the revenue to be generated is 5040*42=      2,11,680 (Klein et al, 2020, pp.397-412).  The Markup price is assumed to be 100% above the cost and the calculated total cost is 105,840 (Garcia, 2017).

Cost = price / (markup + 1)

Markup is 100%

Cost = $42 / (1+1)

Cost per unit (average) = $21

As the below table represents the different prices of EATES calculator in three different locations in China; the average price in china is 35.67, it’s cheaper to Canada because while importing to Canada the exchange rate plays it role which makes it expensive in Canada (Table 2).

2. Cost to transfer the goods from the manufacturer to shipping port:

The EATES calculator is being produced in Shanghai in china and is transported to the port of Ningbo-Zhoushan for further transporting to Canada via cargo ships (Table 3). The distance from the manufacturer in shanghai to port of Ningbo-Zhoushan is near about 170 km. The per km cost is 12/ KM which makes the total additional cost of 2,040 (Baumers et al, 2017, pp.6957-6970).

3. Cost of shipping a consignment of calculators to specific port

At this time the goods are currently at a port of china which will now be further transported to the Port of Montreal, Canada which is nearly about 9380 km. The per km freight charge is somewhere about $2/km from port of china to port on Canada. The total cost which might also get included into the final cost is $18760 which is basically the freight charge. The cargo insurance has been ignored for this topic (Table 4).

4. Cost of customs

At the Canadian port if Montreal the custom duty payable on the product is 5% on its total value. By the time the product reaches Montreal, the value of the goods is $126640 and the customs payable at this point is $6332 (Table 5).

5. Transferring to distributor

From here the goods will be sent to the distributer of EATES calculators which is based in Quebec city. The distributer is Production Importation Kameleon Inc which is 256 km away from the Montreal port. The goods will be sent by road and the total fare payable will be $5 per km for the whole consignment. This brings the cost to send the products at $1280. Other than that there will be loading/unloading expenses of $500. Hence the total value added at this point is $1780 (Bragg, 2021).

6. Lot size and distributer expenses

The total lot size is 5040 pieces of calculators with a price tag of $42 on an average. From the distributor the goods will be sent to various parts in Canada. There is no selling cost for the distributer but a commission based model is adopted. 5% of the sales value is provided to the distributer Production Importation Kameleon Inc which comes out to be $2.1 per calculator. The total commission on the consignment is $10,584 (Table 6).

7. Final cost, profits and competitor

The final cost of the lot is $145,336 after adding all the transport costs into cost of production. The per unit profit comes out to be $13.16 and the overall profit is $66,344. The profit margin on the EATES calculator is 31% (table 7).

There are many competitors in the market some of them are selling products originated from china. For EATES calculators a local competitor is Vintage calculators’ which has made available products with a price of $50 (average) in the market. However the EATES has an average price of $42 which makes it more competitive in the market (Garcia, 2017).

Reference

• Baumers, M., Beltrametti, L., Gasparre, A., & Hague, R. (2017). Informing additive manufacturing technology adoption: Total cost and the impact of capacity International Journal of Production Research, 55(23), 6957-6970.
• Bragg, S. (2021). Freight In and Freight Out. Retrieved June 13, 2021, from https://www.accountingtools.com/podcast-blog/2020/3/3/freight-in-and-freight-out-177
• Garcia, M. (2017). How to Calculate Markup Percentage. Retrieved June 13, 2021, from https://bizfluent.com/how-4425471-calculate-markup-percentage.html
• Klein, R., Koch, S., Steinhardt, C., & Strauss, A. K. (2020). A review of revenue management: Recent generalizations and advances in industry applications. European Journal of Operational Research, 284(2), 397-412.

Appendix:

Table 1

Table 2

Table 3

Table 4

Table 5

Table 6

Table 7