CASE 6.

1 Tempo LTD

Zayar Zaw Win & Sai Thiha

IES (International Executive School)

Intro to Logistics
Question 1: Should Terim let somebody else complete the transaction because he knows
that if he does not sell to the North Koreans somebody else will?

This question may stimulate a great deal of discussion among students. On the other hand,
Terim thinking about chemicals and lumber transaction with North Korea, which he is not
really familiar that issue. These factors can be argued to complete the transaction. Terim
may have backed away from the proposed deal because of uncertainty over exactly how
Northe Korea would use the chemicals. On the other hand, Turkey has demonstrated that
it has imposed trade sanctions on North Korea, but trade involving prohibited partners can
occasionally succeed by routing goods through other countries.

Question 2: What are the total costs given in the case for the option of moving via
Romania?

Wonsan to Constantza 42’000 USD

Suez Canal charges 3’100 USD
Constantza into Turkey 15’000 USD
Handling fees 6’250 USD
Generating false Romania origin 10’211 USD
documents
Total 76’561 USD

Question 3: What are the total costs given in the case for the option of moving via Syria?

Wonsan to Latakia 33’000 USD

Suez Canal charges 3’100 USD
Latakia into Turkey 12’000 USD
Handling fees 6’250 USD
Projected amount of rusvet at Syrian– 50’000 USD
Turkish border
Total 93’550 USD

Question 4: Which option should Terim recommend? Why?

Terim can choose both option, because the option Romanian is cheaper then Syrian but on
the other hand it is three week longer than Syrian, But the Romanian option is likely to be
riskier than Syria in the sense that things could go wrong in the record recovery process.

Question 5: What other costs and risks are involved in these proposed transactions,
including some not mentioned in the case?

Entertaining North Korean officials can be seen as a cost and risk. At the very least, luxury
hotel accommodations as well as corporate dinners and receptions don’t come cheap.
From a risk perspective, entertainment has the potential to get out of hand and cause
embarrassing publicity. There is also a chance that some russet fees may unexpectedly
increase, especially those associated with creating fake documents. If the contributors of
the documents understood the captive nature of timber exports from Romania to Turkey.
These service providers will be able to improve their position to increase their income. A
more general risk to these proposed transactions s the volatile political situation in the
Middle East. One manifestation of this instability is through disruptions in transport routes.

Question 6: Regarding the supply chain, how—if, at all—should bribes be included? What
functions do they serve?

The purpose of bribes is to get facilitate completion for all works. And also depends upon
the situation and contact of the country which we are working for international
transactions. For example, North Korea, Thailand, Lao, Cambodia and Myanmar, those
country are use to bribes and if we are not bribes for our works, it is difficult to work with
the some of government staff for such as documentation running and especially for import
and export products. The United States or Singapore, bribes are theoretically illegal—
regardless of the circumstances. Under this scenario, bribes would not be included in the
supply chain.

Question 7: If Terim puts together this transaction, is he acting ethically? Discuss.

This is depending upon the ethical issues; one is focuses on a personal ethic to guide one’s
action. Another one is that anything illegal is much more. Having said this, The Romanian
route is questionable because the document changes associated with it changes to this
document may be considered illegal regardless of country. In other words, some may view
it as ethical because the Syrian route does not involve overtly illegal activities. Terim simply
follows the accepted protocol for many international transactions. In addidion, Syria’s use
is smart because erim is avoiding a Turkish port and the associated penalties are higher.
From another perspective. The case suggests that Terim is struggling to do business with
the North Koreans in part because they fear they will support their communist regime and
terrorist policies. Any transaction involving North Korea could be viewed as unethical in the
sense that Terim is violating his person code of conduct.

Question 8: What do you suggest should be done to bring moral values into the situation
so that the developing countries are somewhat in accordance with Western standards?
Keep in mind that the risks involved in such environments are much higher than the risks of
conducting business in Western markets. Also, note that some cultures see bribery as a
way to better distribute wealth among their citizens.

Since this case involves organizations located in the two nonwestern countries, it is not
culturally sensitive to bring ethical values more in line with western standards.