Thème 6 - Production I Choosing suppliers When choosing suppliers, one has to consider: - the lead time: delay between placing a purchase order and receiving the goods; - minimum and maximum order quantities; - insurance coverage provided by the vendor; - freight services offered with free on board (FOB) terms: FOB origin, FOB shipping point or FOB destination indicates at which point along the way the liability for the goods being transported is transferred from the buyer to the seller. A carrier will issue a bill of lading when accepting a cargo for shipment. A carrier may refer to truck transportation or lorry transport are well as sea, air or rail freight; - return and faulty goods policy; - drop shipping capability: ability to directly deliver a customer; - Payment terms e.g., net 30 days specifies that the payment is expected 30 days after the invoice date or 1%/10 net 30 days means that a cash discount of 1% is offered when the payment is made within 10 days or less. Letters of credit or letters of undertaking are payment mechanisms used in international trade. The International Chamber of Commerce (ICC), nicknamed the " World Business Organization " , publishes and updates a set of international commercial terms known as Incoterms. The ICC was created in 1919 and is headquartered in Paris. & TECHNICAL TERMS Free on board (FOB) A bill of lading A cargo Truck transportation or lorry transport Drop shipping Net 30 days A cash discount Letters of credit or letters of undertaking The International Chamber of Commerce (ICC) Incoterms Franco à bord (FOB) Un connaissement, une lettre de transport Un fret, des marchandises, une cargaison Le transport par camion Livraison ou acheminement direct Paiement exigé dans les 30 jours suivant la date de facturation Un escompte de caisse ou de règlement Une lettre de crédit ou d'engagement La Chambre de Commerce Internationale (CCI) Les Incoterms 288