Nuernberg Augsburg Maschinenwerke - Case Study Example

 Nuernberg Augsburg Maschinenwerke Question 2: Which of the routing alternatives would you recommend to meet the initial 90-day deadline for the 25-bus shipment? Train or waterway? To which port(s)? What would it cost? If an individual would assume that the means of transportation to be used from Prague to Rotterdam or from Prague to Hamburg is rail transport, well then the overall transportation costs for both the alternatives would be virtually identical. Though the cost for rail transport to Rotterdam is € 300 cheaper than to Hamburg, on the other hand, shipping costs from Rotterdam are €300 cheaper than from Hamburg, and this is based on € 6000 times. 95. Since all the transportation costs added together are fundamentally the same, the considerations that would matter in the selection of the routing alternative would therefore be based on the services that come along with the routing choice. Thus, the route that gives optimum services will be the one to settle on. As a matter of fact, it would be important to note that the initial shipment is of significance. Thus, the best or preferred alternative would be for rail transport to be used from Prague to Hamburg and an Ocean vessel to be used from Hamburg to Santos. The rationale behind this alternative is that the given transit times with Hamburg are fixed, that is, three days by rail and eighteens days by water. Compared to Rotterdam, the rail transit time is four or five days though water transportation s seventeen days. However, the case does not offer insight on how the port congestion and the issues concerning it could affect the time in which shipments would be loaded. Additionally the case does not give information concerning the ports performance in terms of the damage and loss metrics. Moreover, though the case shows that the rail’s transit period is either four or five days, information on what percentage of shipments could be completed in four days could have been of significance. Question 5: What kinds of “customer service” support must be provided for this initial shipment of 25 buses? Who is responsible? From the case study, different constituencies are involved in the initial shipment, for instance, dockworkers, railroads and ocean carriers. However, particular customers more so the public transit authorities buy products from Nuernberg Augsburg Maschinenwerke (N.A.M.). Consequently, N.A.M should therefore be the responsible party that should offer direction on customer service support since the customers buy products from this company. Accordingly, many different kinds of customer service support are available. In effect, Real-Time shipment tracking company should indeed be the best option for customer service support since the firm is in a position to let the customers the location of the shipment at any given time. Additionally, N.A.M might be useful in giving the customers regular updates concerning the shipment process. Maybe N.A.M could email the customers important progress points such as the shipment have set off for Hamburg from Prague; the shipment from Prague has now arrived in Hamburg. Since successful performance on the initial shipment is very important in getting other future businesses, N.A.M should consider getting one of their managers to accompany the shipment. It is also important to note that N.A.M works closely with Hapag-Lloyd AG in the transoceanic shipping business. Hapagad-Lloyd is in a position to offer a cheap and flexible commodity cost. In fact, through its alliance with NYK, P&O Nedlloyd, OOCL and MISC, for the ocean transport of buses, one vessel could carry up to one hundred and twenty five buses as deck cargo. Question 6: The Brazilian buyer wants the buses “delivered” at Santos. Weiss looks up the International Chamber of Commerce’s year 2000 Incoterms and finds two categories of “delivered” at a receiving port. They are: DES (Delivered Ex Ship). In this type of transaction, the seller must pay all the costs and bear all the risk of transport up to the foreign port of unloading, but not including the cost or risk of unloading the cargo from the ship. DEQ (Delivered Ex Quay). This is the same as DES except that the terms provide for the seller to pay the costs of unloading the cargo from the vessel and the cost of import clearance. How should he choose? Why? Considering the importance of the initial shipment as earlier stated, the more the control the Nuernberg Augsburg Maschinenwerke (N.A.M.) has over the shipment process, the better. From the two options, Delivered Ex Quay (DEQ) option is more costly, however from a deeper perspective DEQ offers N.A.M an opportunity to have a bit of control into the shipment process. Moreover, since N.A.M takes on the additional costs that are associated with DEQ willingly, the customers would always view this from a positive perspective. Thus, the Brazilian Buyer should settle on DEQ since N.A.M would pay some of the costs associated with the shipment. When considering settling on the best option regarding the shipment to Santos, one would have to realise that the Brazilian authorities are somehow feeling threatened politically. The political heat is due to the fact that they are behind time in implementing their transportation plan and therefore need to prove to the public that the new programs were on track. In effect, the Brazilian authorities in this case work with N.A.M on strict conditions: that N.A.M delivers the first twenty-five buses to Santos within three months. Question 7: Would you make the same routing recommendation for the second, larger (199 buses) component of the order, after the initial 90-day deadline is met? Why or why not? Water transportation between Prague and Hamburg is the better option since with this option; one would not need to worry about the pressures as he would about the larger component of the order. The rationale therefore would be although transportation over water is slower, using this option would be cheaper since it saves money, for instance, since € 48 is saved on every bus, one hundred and ninety nine buses would thus equal to saving € 9552. This is much cheaper compared to rail shipments. On the other hand, it would not be economical to trading off three days transit time in order to save € 48 given that the selling price for every single bus would be around € 120000. Ultimately, using the waterways instead of trains to reach the Hamburg port from Prague would decrease the transport cost by €48 per bus. Waterway transportation would increase the transport time necessary by 3 days to Hamburg. Tentatively, using the water means to transport the buses is not a bad idea after all. Work cited Murphy, Paul Regis, and Donald F Wood. Contemporary Logistics. 1st ed. Upper Saddle River, N.J.: Prentice Hall, 2011. Print. Read More