Question

Describe the international supply chain and explain how payment takes place.

Answer 1

International supply chain is a world wide network of supplies when company purchase and uses goods or service globally.Supply chain involves several people,process and resources which are engaged in the production, distribution, management of supply of goods or services and providing overall service to the customer.It describes the movement of input raw material through various process and it's final supply to the customer.

There different ways or sources of payment.Firstly company can make direct payment to the supplier or by selling of invoices by supplier to its financial institutions and obtaining money.Due to global level of supply chain with multinational buyers and suppliers there are few financing facility are available to meet the working capital requirement and which is useful for both buyers and the sellers like reverse factoring which helps firm in optimization of it's cash flows and lengthen their payment terms to suppliers.