Lamp Shade Imports (Scenario)
The ABC Lamp Company is an SME that designs and manufactures high quality lamps that are sold in high-end furniture stores across Canada and the United States. ABC imports lamp shades from Asia where costs are lower than in North America. ABC has received a large order from a hotel chain that wants to purchase 5,000 lamps in the next three months, and ABC will need to import corresponding lamp shades. ABC recently ended a relationship with a Chinese supplier due to the poor quality of shades that were shipped. ABC managers are seeking a new Asian supplier that can fill the hotel lamp order.
-Which of the following factors should be considered by ABC when trying to obtain financing for export sales?
A) Where is the manufacturing facility of the Asian exporter located?
B) Does the Asian lamp shade supplier sell to ABC's competitors?
C) What is the creditworthiness of the Asian lamp shade exporter?
D) At what bank does the Asian lamp shade supplier do business?

Question

Quizplus · Accepted Answer

The creditworthiness of the Asian lamp shade exporter is important to consider when obtaining financing for export sales. This will help ABC determine the level of risk in doing business with a particular supplier and ensure that payments can be made on time. Factors like the location of the manufacturing facility, whether the supplier sells to competitors, and the bank the supplier does business with are not directly related to securing financing for export sales.