Latrite Ltd is a food processing company in New Zealand. It is sending a consignment of its canned meat to a customer in Japan.

Mark scheme

Marking points from the official mark scheme (May/June 2011). The mark or mark type is shown in brackets.

1. [4] (a) Any two reasons explained in context × 2 marks each: storage of the raw materials/finished products/canned meat/to keep food fresh; food may be displayed – awaiting sale/transport/export to Japan; protection of the food against damage/theft/weather; provides cold storage – needed for some food products/before food is processed; can regulate supply so that there are always sufficient goods to fulfil orders; can even out price fluctuations especially of some foods which may be seasonal; some of the foods can be prepared for sale e.g. packing, bottling. Any other relevant point.
2. [6] (b) Any three difficulties explained in context × 2 marks (not in context = 1 mark only): difficulties of language – different languages in NZ and Japan; difficulties of distance – need for container ship; difficulties about transport – air transport may be too expensive; difficulties of currency – payment in yen; difficulties of communication – may be difficult to confirm order/delivery arrangements; difficulties about health regulations – Japan may have health rules that the company has to follow; difficulties about delay in payment – may be using a method of payment that is slow and so cash flow problems may arise; difficulties with documentation – more complex documents, different documents from home trade e.g. bill of lading; difficulties with protectionist policies e.g. tariffs, quotas and embargoes. (NB if three protectionist policies given as difficulties award 4 marks max.) Any other relevant difficulty.
3. [4] (c) Any four points × 1 mark each or two well-explained points × 2 marks: freight forwarders are expert at transporting goods; because there is considerable distance and Latrite Ltd is unlikely to have its own delivery system; needs to arrange transport e.g. container in ship; needs to arrange the documentation; needs to arrange customs clearance in NZ and in Japan; may need to arrange delivery to the customer in Japan; may need to arrange storage in Japan; saves time arranging transport; provides reassurance in overcoming transport problems; freight forwarders have vehicles/branches in many countries; cheaper/safer/quicker = 0 marks unless qualified. Any other relevant point.
4. [6] (d) Level 2 (4-6 marks) Candidate has discussed the advantages and disadvantages of using both email and telephone and has given a reasoned choice. (If a candidate has omitted advantages/disadvantages/considered only one method of communication/not made a choice = award 4 marks max.) Email is a fast electronic service that Latrite could use at any time of day so overcoming difficulties because of time zones. It enables written information to be given and so this may assist understanding for the Japanese buyer who may need a translation. It can be forwarded by the buyer if someone else needs the information. Although Latrite may request an acknowledgement of the email, it is possible that the email may not be received or that the buyer takes time to access the email. If the matter is urgent this may cause problems. Telephone is a direct form of communication. If contact can be made, Latrite can discuss the problem with the buyer and an immediate solution may be found. On the other hand, it may be difficult to contact the buyer as he may not be available or there are problems of time zones. It may be difficult also for the buyer and the seller to understand one another. I would recommend telephone if the problem is very urgent and if an immediate solution needs to be found. If, however, the problem is complex, email may be better as thought can be given to finding a solution and there may be greater understanding between the two parties. Level 1 (1-3 marks) Candidate has listed some advantages/disadvantages of one or both methods of communication with/without a recommendation. I would use email. It is fast and it is written. You need a computer. Telephone is also fast but the person may not be available. There may be misunderstandings. The language is not the same in New Zealand and in Japan.