Question

In: Operations Management

3. FOB means Free on Board and has to do with who pays for the shipping...

3. FOB means Free on Board and has to do with who pays for the shipping and, legally speaking, who owns the merchandise. We are interested in Who Pays the Shipping Charges.

a. When you order online, are you aware of shipping charges? Does it affect your decision to order?

b. Do you think shipping are a BIG or a SMALL issue for a business?

c. Is it better for a business to have 'free" shipping for its customers or charge a shipping fee?

d. Why did I use quotation marks (") around the word FREE?

e. Define FOB Shipping Point and FOB Destination.

Expert Solution

a. When you order online, are you aware of shipping charges? Does it affect your decision to order?

Yes, I am aware of the shipping charges. At the payment page shipping charges in mentioned.

Yes, it affects my decision to order. because when the order is of small amount and the buyer is charging higher shipping charges it will affect my decision to order.

b. Do you think shipping is a BIG or a SMALL issue for a business?

It's a big issue for business. when the business is well established and you are getting many orders in a day. Shipping charges will create a big issue. If a business pays the charges it will make a cost for the business and if customers pay te charges it will impact on his buying decision.

c. Is it better for a business to have 'free" shipping for its customers or charge a shipping fee?

The business has to categories the shipping fee according to the order amount. If the order is above from the amount the shipping is free and if it's below from the amount customer has to pay the shipping fee

d. Why did I use quotation marks (") around the word FREE?

Because it created the attention of the customer on the word free and impact the decision of the customer to buy the product

e. Define FOB Shipping Point and FOB Destination.

FOB Shipping Point

It means buyers have pay for the delivery of the goods. Ownership of the goods are transfer to the buyers once and goods leave for the seller warehouse

FOB Destination

Free on Board Destination means the seller has to pay for the delivery of the goods. Any liability or loss will be injured by the seller until goods will be received by the buyer

keosha answered 2 years ago

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