| Course | OPM-4150 Logistics |
|---|---|
| Module | Module 4 |
| Paper type | Module 4 written assignment: materials management, global issues and strategic planning |
| Length | About 587 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | B.S.B.A. in Operations Management |
| Updated | October 2026 |
Free sample paper for OPM 4150 Module 4
The $310 Table That Costs $370: Landed Cost and Risk in a Global Sourcing Decision
Student Name
B.S.B.A. in Operations Management, Thomas Edison State University
OPM-4150: Logistics
Mentor Name
Month Day, Year
The $310 Table That Costs $370: Landed Cost and Risk in a Global Sourcing Decision
The Choice
The distributor sells about 1,440 stainless steel prep tables a year. A domestic supplier in Ohio sells them at $415 each, delivered. A manufacturer near Ho Chi Minh City quotes $310 each, FOB Ho Chi Minh City, in containers of 120.
Trade Terms
Gourdin (2006) explains that international sales terms decide where costs and risks pass from seller to buyer. Under the Incoterms rule FOB, free on board, the seller delivers the goods on board the vessel at the named port; from that point the buyer pays freight, insurance, duties and inland transport and bears the risk of loss (International Chamber of Commerce, 2019). The $310 price therefore covers far less than the $415 domestic price.
Landed Cost
The import's landed cost is about $370, still $45 below the domestic price. But landed cost is not total cost.
| Cost element per table | Basis | Amount |
|---|---|---|
| FOB price | Quote | $310.00 |
| Ocean freight | $4,200 per 40-foot container / 120 | $35.00 |
| Marine insurance | 0.5 percent of price plus freight | $1.73 |
| Import duty | Assumed rate of 3.4 percent of value | $10.54 |
| Harbor maintenance fee | 0.125 percent of value | $0.39 |
| Merchandise processing fee | 0.3464 percent of value | $1.07 |
| Drayage from port | $1,100 per container / 120 | $9.17 |
| Customs broker | $250 per entry / 120 | $2.08 |
| Landed cost | | $369.98 |
Pipeline and Safety Stock
The distributor owns the tables from the port of loading, about six weeks before they reach Paulsboro, and the longer, less predictable lead time calls for three weeks of safety stock instead of one. Weekly demand is about 27.7 tables, and carrying cost is 25 percent a year.
Importing saves about $44,700 a year, or 7 percent, after counting pipeline and safety stock.
| Item | Vietnam | Domestic |
|---|---|---|
| Purchase cost (1,440 tables) | $532,766 | $597,600 |
| Pipeline inventory carrying cost | $15,368 | none (delivered terms) |
| Safety stock carrying cost | $7,684 | $2,873 |
| Total annual cost | $555,818 | $600,473 |
Risks
Christopher and Peck (2004) argue that longer, global supply chains are more exposed to disruption and need resilience built in, through visibility, flexibility and alternative sources. Three risks apply. First, disruption: a port closure or a shortage of containers could stop supply for weeks. Second, quality: a defective container cannot be returned quickly, and restaurants need tables that pass health inspections. Third, cost changes: tariffs and freight rates can change within a year, and a doubling of ocean freight would cut the saving by more than half.
Sensitivity
The saving depends on assumptions. If ocean freight doubled to $8,400 a container, landed cost would rise by $35 a table, about $50,400 a year, which would erase the saving. If the duty rate rose by 10 percentage points, landed cost would rise by about $31 a table. Either change would make the domestic supplier competitive again, which is why the recommendation keeps a share of the business at home.
Recommendation
Split the business. Buy about 70 percent of tables from Vietnam for the savings, and keep 30 percent with the domestic supplier to preserve a fast, reliable source and a relationship that can scale up if imports are disrupted. Inspect the first three containers at the factory before shipment, and review the split each year as freight and duty rates change.
Conclusion
The import's $310 price becomes about $370 landed and saves about $45,000 a year after pipeline and safety stock costs. The savings are real but exposed to risk, so a split between global and domestic sources balances cost and resilience.
References
Christopher, M., & Peck, H. (2004). Building the resilient supply chain. International Journal of Logistics Management, 15(2), 1-14. https://doi.org/10.1108/09574090410700275
Gourdin, K. N. (2006). Global logistics management: A competitive advantage for the 21st century (2nd ed.). Blackwell.
International Chamber of Commerce. (2019). Incoterms 2020: ICC rules for the use of domestic and international trade terms. ICC.
Reading the OPM 4150 Module 4 assignment instructions
This module's written assignments cover materials management, global logistics and strategic planning. Expect to compare global and domestic sources, explain trade terms, build a landed cost and account for the inventory effects of long pipelines. Show each cost element per unit, state your assumptions, such as the duty rate, and carry the comparison through to total annual cost. Then weigh the risks of a global supply chain, since a sourcing decision rests on resilience as well as price. Check how the saving holds up when likely-to-change assumptions, such as freight and duty rates, move, and say what would make the domestic supplier competitive again. Show each per-unit element in one table so the landed cost can be traced line by line.
How this OPM 4150 Module 4 example is built
The paper sets out the choice and explains FOB terms with the Incoterms rules. A table builds the landed cost element by element. A second table adds pipeline and safety stock carrying costs and compares annual totals. A section applies research on supply chain resilience to three risks, and the recommendation splits the business between sources with inspection and an annual review. The conclusion restates the trade-off between cost and resilience. A sensitivity section shows that a doubling of ocean freight would erase the saving and that a 10-point rise in duty would cut it sharply, which supports keeping a domestic share. Factory inspection of the first containers addresses the quality risk directly.
Where the marks sit in the OPM 4150 Module 4 rubric
Mentors grade this assignment on accurate landed cost and total cost calculations, correct use of trade terms, attention to global risks and a reasoned recommendation. Papers that go beyond landed cost to pipeline and safety stock show command of the module. Explaining who bears which costs under the chosen Incoterm demonstrates understanding of global trade. A recommendation that balances cost with resilience shows strategic judgment. A sensitivity test that shows what would erase the saving links the risk discussion to numbers. Stating assumptions openly, such as the duty rate, lets a reader judge the result. A split between sources shows that cost and resilience were weighed together. Sourced fee rates add credibility.
OPM 4150 Module 4 help: mistakes that cost marks
Students lose points by comparing quoted prices instead of landed costs, by ignoring pipeline inventory or by recommending the cheapest source without weighing risk. Others misstate who pays freight under FOB. List every cost element per unit. Count inventory the buyer owns in transit. State assumptions, such as duty rates. Weigh disruption, quality and cost risks. Test what would erase the saving, and keep the domestic source as insurance against those changes. Show every element of landed cost per unit before comparing annual totals, so nothing is missed. A free first sample on your own OPM-4150 global logistics assignment is available on request.
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OPM 4150 Module 4 questions, answered
Where can I find a free OPM 4150 Module 4 sample paper?
A landed cost and total cost comparison of imported and domestic prep tables is the assignment above.
What is landed cost?
The total cost of a product delivered to the buyer's facility, including price, freight, insurance, duties, fees and inland transport.
What does FOB mean under Incoterms?
The seller delivers the goods on board the vessel at the named port, after which the buyer bears cost and risk.
Why does global sourcing raise inventory costs?
Longer pipelines mean more inventory owned in transit, and less predictable lead times require more safety stock.
How can a firm reduce global sourcing risk?
By keeping alternative sources, improving visibility, inspecting quality before shipment and reviewing the split as costs change.