Report Case Solution & Answer

Report Case Solution

Part B

a)      Terms of Purchase

  1. The goods provided shall be in conformity with the quality and quantity as prescribed in the order.
  2. The price stated in the contract shall not subject to change.
  3. The risk would be transferred to the buyer upon delivery.

b)      Terms of Sale

  1. Buyers will pay the set amount within 30 days’ time period.
  2. The cancellation of the contract is dependent on Seller’s prior written consent.
  3. Seller will deliver the product in a reasonable time period after receiving the order from buyer.

c)      Other Terms

The other terms include:

  1. Infringement
  2. Indemnification
  3. Confidentiality

These should be considered with quite significance.

d)     Challenges in JIT

The company faces some big challenges by using JIT Supply Chain, when the company fails to adjust with the increasing demand or if supplier fails to fulfill the distribution requirement, the company could incur heavy losses. The risk of stock out is the prime factor, which the company faces in using the JIT supply chain. Moreover, continued change in economic and market conditions makes JIT system unfavorable as predicting demand in such an uncertain environment is a difficult task.

e)      Issues of Start Up

The entrepreneur lacks one basic requirement of additional capital but has distinct and innovative ideas to come up with the product, which can serve better as compared to the overall market. In the given case as well, soon after the product was launched, demand increased to about $1M from a retailer, which obviously could not be arranged from just friends and families.

 The issue could be resolved from considering the short-term loan from the investment bankers, which could be supplemented from the conditions imposed to the retailer of payment in advance. The vendors would not be in favor of supplying any additional fund due to the reason that they would be very skeptical with regards to a new company as it may have a risk of not performing. The chances are that the entrepreneur could gain from vendors if they are chosen from another region………………..

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