Project expects to supply them for construction

Assignment Help Operation Management

Reference no: EM132222794

1. An American exporter of various components that are used in a project expects to supply them for the construction of a bridge in a European country over the next 6 months. The transaction for these exports may be quoted for in either American dollars or the Euro. The current value of the goods is $50,000 and the quote may be in dollars or the current equivalent Euros. The exporter and most banks anticipate that the dollar will depreciate over the next 6 months. Given this reliable expectation, should the transaction be done (and quoted for) in Euros or the Dollar, by the American exporter. Please answer with and explain your recommendations.

2. The above exporter decides to export only on the basis of payments that he insists should be made in advance (or, cash advances alone). Do you anticipate any problems for the exporter and importer if the exporter were to insist on payments being made in this manner? Please elaborate and explain.

3. In international trade both Letters of Credit as well as Bills of Exchange are used as methods or ‘modes’ of payment and the former is the more popular and safer method.

Explain (a) What is a letter of credit

(b) What is a Bill of Exchange

4. Explain the following terms/conditions with reference to letters of credit:

a. A confirmed letter of credit

b. A confirmed and IRREVOCABLE letter of credit

c. A back to back letter of credit

d. A letter of credit with a Red Clause

5. The American exporter (Refer to Question 1) makes a shipment for the order after 4 months (in keeping with the shipment schedule).

(a) What are the documents that will normally be presented by the American Exporter to the bank so that he may be paid through the letter of credit opened by the buyer.

(b) Explain what each of the document is and does.

Reference no: EM132222794

Questions Cloud

What is learned system of knowledge-behavior-attitudes : What is a “learned system of knowledge, behavior, attitudes, beliefs, values, and norms shared by a group of people” called?

Contrast the concepts of intrinsic and extrinsic rewards : Compare and contrast the concepts of intrinsic and extrinsic rewards. Identify and discuss the four federally mandated employee benefits.

Purchasing slow fashion clothing for this target market : What needs are fulfilled by purchasing slow fashion clothing for this target market?

Underlying reasons for conflict has occurred in your life : Which of the underlying reasons for conflict has occurred in your life?

Project expects to supply them for construction : An American exporter of various components that are used in a project expects to supply them for the construction of a bridge in European country.

Sustatinablity of organizations operations function : What are strategies and sustatinablity of an organizations operations function used by appraising its effeiciency and effectiveness?

What are resources and competencies : What are resources and competencies? How are they involved in achieving a sustained competitive advantage?

Three levels of management planning : Reading an article published within the previous year related to three levels of management planning

Reinforcement theory concentrates solely : Reinforcement theory concentrates solely on what happens when someone takes some action.

User Account

All Pages