3. For the finished goods logistics to the Port of Valencia, decide the route

and modes of transportation, given the opportunities and risks of this

contract proposal. Map the possible routes under consideration and

provide a reasonable justification for preferring your chosen route.

Estimate the time of delivery. Write the full Incoterm you will quote for

this logistics movement and explain why you chose it. How does this

Incoterm and routing support your risk strategy?

4. Assuming everything goes as expected (best case), what is an

estimated transportation cost for this contract?

Please Provide a Gantt chart.

Here are the six basic elements of a project execution plan:

1. Project Scope. The project scope is a broad view of objectives and a

detailed list of all the elements involved in the project. ...

2. Quality Standards....

3. Goal Statements...

4. Resource Allocation for the Project Execution Plan. ...

5. Project Schedule....

6. Organizational Components./nOnce again, Brightfield has the option to load the cargo onto a 747 in

Chicago for transport to Valencia. Such transports are, again, limited to 10

units per aircraft, but will incur $30,000 in costs beyond normal

transportation costs for this leg.

Risks

Delay:

The terms of the proposed contract require a tight window of

140 days for delivery of the entire production run. Failing to meet that 140

days incurs a stiff financial penalty of 5% per day, increasing to 50% on day

10. Delays past day 10 will cause the order to be contractually cancelled.

effectively bankrupting

result. Delivery will be deterd, Naturally, delays are the enemy as a

by the Incoterms.

Damage:

Significant and unrepairable damage to any cargo piece would

cause the cargo to be destroyed on inspection, and would constitute breach

of contract terms, unless another piece could be delivered in time to meet

the contract terms.

Theft:

Theft of any cargo piece would constitute breach of contract

terms unless another piece could be delivered in time to meet the contract

terms.

Cargo Loss: Cargo loss would have the same effect on Brightfield and the

contract as a delay of 11 days.

Case Questions:

Based on what you read of this case, any research you do, and any

reasonable assumptions you state, complete the following in a thorough

fashion and with good business communications style:

1. Propose a list of risks related to this contract proposal and conduct a

qualitative or quantitative risk analysis. Determine which risks you

consider to be worth addressing, and provide mitigation suggestions

for those risks. Risks listed in the case are not necessarily the only

risks worth analyzing.

2. For the raw materials supply logistics from Tienmu, decide the route

and modes of transportation, given the opportunities and risks of this

contract proposal. Map the possible routes under consideration and

provide a reasonable justification for preferring your chosen route.

Estimate the time of arrival to Chicago. Write the full Incoterm you will

require for this logistics movement, and explain why you chose it. How

does this Incoterm and routing support your risk strategy?/nBrightfield Industries, Inc.

Brightfield Industries, Inc. of Chicago, Illinois found itself with a sudden great

opportunity when a prospective customer in Spain called up asking about a

huge new contract. The contract was considerably larger than anything

Brightfield had ever fulfilled, and would, in fact, almost double their revenue

from their last fiscal year by itself. Brightfield had the capacity to do the

work, but they had never handled the logistics of such a sizeable order and

had only ever done regional trucking logistics to domestic customers.

Brightfield prided itself on using outbound logistics nationally as a

competitive advantage and had also been sourcing from China and Malaysia

very successfully for several years already.

On the strength of this confidence in its logistics capabilities (plus the hope

that they could quickly leam what they didn't already know), Brightfield

agreed to strike the deal, which included considerable penalties for delivery

delays. The contract specified 600 units be delivered within 140 days at an

expected profil of $41,538 per unit. The retail purchase value of each unit is

normally $246,153, but Brightfield agreed to a volume discount of $226,153.

To fulfill this new order, Brightfield reached out to its main supplier of

subassemblies. Tienmu, Inc. in Shenzhen, China. Tienmu provided the

subassemblies via an intermediary courier service, normally, but this order

was to be so large that special terms needed to be negotiated. Each

subassembly was several thousand pounds and was normally shipped in

containers with substantial blocking and bracing, one per container. The

material needed to be drayaged to the port of Shenzhen, loaded onto a ship,

shipped across the Pacific Ocean to be offloaded onto rail cars in the US, and

then moved via rail to Chicago, where it would be unloaded directly from the

rail cars into the production facility of Brightfield, located at 1060 W. Addison,

Chicago IL.

Brightfield also has the option to use air cargo on an emergency basis for

these bulky materials. A cargo 747 aircraft must be chartered to handle the

size and weight, and can carry up to 10 units for a charge of $20,000 per unit

more than normal transportation costs. Units delivered by air freight will

reliably arrive at Chicago in approximately 2 days. Other raw materials used

for this contract were sourced locally, and were ignored for the purposes of

this case.

After a 60-business-day production process in Chicago, the finished goods

needed to be loaded back onto rail cars and moved via ship to the Port of

Valencia, where the customer assumed control of the goods.

Transport to Valencia most likely requires from 19 to 31 days, depending on

various factors outside of Brightfield's control, assuming transport and export

clearance happened as expected. The customer was not familiar with

logistics, per şe, but had relationships locally to help with drayage and

customs clearance. The customer was not able to arrange international

transportation, and required Brightfield to arrange this.