Landed Cost Simulator

This page is accessed via Landed Cost > Landed Cost Simulator.

Note: Based on the method of coding, the Landed Cost Simulator is available as an ADF (Application Development Framework) screen and a JET (JavaScript Extension Toolkit) screen. By default, it will be available in the JET version. However, if you want to view the ADF version, you can configure it via Configuration and Administration > User Configuration > Menu Manager. For details, refer to Menu Objects.

The ability to source products from around the world provides businesses with opportunities to reduce costs and increase product availability, potentially resulting in strategic gains and profitability. However, this opportunity also brings the challenge of accurately estimating the total cost of a shipment and analyzing profitability on its basis. All businesses that import or export need to know what is the landed cost or the total cost of goods that they are buying or selling.

Landed cost refers to the total cost of a product incurred till the product reaches the buyer. The list of components that are required to determine landed costs includes the original cost of the item, all brokerage and logistics fees, customs duties, tariffs, taxes, insurance, currency conversion, crating costs, handling fees, etc. Not all of these cost components are present in every shipment. In order to accurately calculate the landed cost, all factors including and beyond the primary price must be considered.

The Landed Cost Simulator enables you to calculate (on an ad hoc basis) duties and other import taxes as well as transportation and insurance charges associated with an international shipment and determine the total landed cost for different sourcing options.

Actions

The options Change Logic Configuration and Log Viewer are provided in this list.

Change Logic Configuration

Logic configuration enables you to group different rules, based on which value sets or charges and their formulas are allocated to a trade transaction. GTM ships with the default logic configuration "GTM LANDED COST SIMULATOR DEFAULT". See property gtm.lcs.logicConfig.

However, you can add your own logic configuration depending upon your business requirements via the Logic Configuration page. Use this page to configure the compliance rule set group applicable for landed cost calculation. Depending on this configuration, the value qualifiers and their respective formula expressions are assigned to a trade transaction and landed cost is calculated.

1. Select Change Logic Configuration from the Actions list. The Logic Config Settings dialog box is displayed.
2. Click the Search icon provided beside the Logic Configuration field to select the required logic configuration.

For more information on searching for logic configurations, refer to the topic Rate Maintenance, Landed Cost, and Workbench Search/Search Results.

Log Viewer

Use this option to view the logs of the actions performed in this page.

By default, this option is grayed out. It is enabled only if you perform actions like Assign Costs or Recalculate.

Select the Log Viewer option from the Actions list to view the logs. For more information, see System Log.

Saved Simulations

The Saved Simulations drop-down list provides you with a list of simulations saved previously. Selecting a simulation name from this list populates the header and the Sourcing Options sections with the corresponding shipment information and sourcing option details.

You can save a simulation and access it later for landed cost calculation.

Note: Saving a simulation means that ONLY shipment information, sourcing options, and sourcing details corresponding to a shipment are saved. Landed cost calculation results are not saved.

Saving a Simulation:

1. Enter the details in the header and the Sourcing Options sections.
2. Click Save. The Save Simulation dialog box is displayed.
3. Enter a name for the simulation in the Name field.
4. Click OK.
   The simulation is saved and the name of the simulation is added to the Saved Simulations drop-down list. You can use this simulation later by selecting the simulation name from the list.

Deleting a Saved Simulation:

1. Select the simulation that you want to delete from the Saved Simulations drop-down list.
2. Click Delete. The Delete Simulation dialog box is displayed.
3. Click OK.
   The selected simulation is removed from the drop-down list.

Header

This section allows you to enter basic information about the shipment for which you want to calculate the landed cost.

Entering Shipment Information

1. Select the country that is importing the product from the Country of Import drop-down list.
2. Select the currency in which you want to view the final landed cost of the shipment from the Result Currency drop-down list.
3. Enter the date you want to use to get the exchange rate in the Exchange Rate Date field. (Default will be the system date.)
4. Select the classification type of the product to be imported from the Classification Type drop-down list.
5. Select the type of additional information you want to add from the Product Information drop-down list. You have the following options to select from:

1. • Classification Code: Select this option and enter the classification code of the product to be imported.
   • Item: Select this option and enter the item code of the product to be imported.

6. Enter the quantity to be imported in the Quantity field and select the corresponding unit of measure. This will convert the quantity entered into the required duty and tax quantities and populate the Duty & Tax Quantity fields.

Note: Depending on the product classification code entered/selected, the system will check for any unit of measure (UOM) associated with the product code attribute and display the Duty & Tax Quantity 1, 2, 3, 4, and 5 fields accordingly.
If there is no attribute related to UOM, then GTM will not request this quantity.

1. • Example 1:

The following is an example with Great Britain as the country of import and tariff code 8482400000:

Country of Import = GBR

Result Currency = GBP

Exchange Rate Date = 03/2/2015

Classification Type = HTS GB

Classification Code = 8482400000

Here the application does not request any quantity as the classification code doesn’t have any UOM associated with it.

1. • Example 2:

The following is an example with Great Britain as the country of import, tariff code 2707100010, and DUTY_RATE_UOM1 attribute with ‘L’ as UOM associated with the classification code  HTS GB 2707100010:

Country of Import = GBR

Result Currency = GBP

Exchange Rate Date = 03/2/2015

Classification Type = HTS GB

Classification Code = 2707100010

In this case, once you enter the classification code 2707100010, the application displays a new Duty & Tax Quantity 1 field to allow you to enter the quantity in UOM ‘L’.

For more information on searching for logic classification codes or items, refer to the topic Rate Maintenance, Landed Cost, and Workbench Search/Search Results.

Sourcing Options

Use this section to select a single or multiple sourcing options to calculate and compare the landed cost, duty and taxes, etc.

Note: By default, the system allows you to enter a maximum of three sourcing options. However, you can configure this number using the property gtm.lcs.sourcingOptions.numberOfOptions.

Note: At least one sourcing option is mandatory for landed cost calculation.

For example, you can enter sourcing options like:

1. Option 1:
   • Country of Export = CHN
   • Country of Origin = CHN
   • Transport Mode = AIR
   • Incoterm = CIF
   • Invoice Value = 50000 CNY

2. Option 2:

1. • Country of Export = IND
   • Country of Origin = IND
   • Transport Mode = AIR
   • Incoterm = FOB
   • Invoice Value = 40000 INR

Adding a Sourcing Option:

1. Select the country that is exporting the product from the Country of Export drop-down list.
2. Enter the name of the state or the province that is exporting the product in the State/Province field.
3. Enter the postal code of the state/province that is exporting the product in the Postal Code field.
4. Select the country from where the product is originally sourced from the Country of Origin drop-down list.
5. Select the mode of transportation from the Transport Mode drop-down list.
6. If applicable, select the Incoterm that is associated with this shipment from the Incoterm drop-down list.
7. Enter the invoice value of the shipment in the Invoice Value field, and select the currency of the invoice value from the corresponding drop-down list.
8. Click Assign Costs.

Note: Assign costs must be performed if there is a change in sourcing option since the sourcing option selected may change the qualifiers that are assigned when you click Assign Costs.

After you click the Assign Costs button, the system checks the value set or group of charges and the compliance rule set group applicable for this transaction, based on the logic configuration used for this simulation. The value qualifiers or charges and their respective formula expressions are retrieved from the compliance rule set group accordingly. The value of each formula-driven value qualifier is evaluated from its respective formula, and the system displays the values and the Sourcing Details section.

For more information, see Assign Costs.

Sourcing Details

This section displays the value qualifiers or charges and the corresponding formula (if applicable) associated with each sourcing option. The list of the value qualifiers displayed depends on the logic configuration used.

Note: The value qualifiers are unique for each sourcing option and not all of them apply to different options. Some examples of value qualifiers include Domestic Inland Freight, International Freight, Insurance, Bank Fee, Brokerage Fee, Airport Fee, Packing Charges, etc.

The value of the value qualifiers can either be entered manually or they can be formula-driven, i.e. calculated by the system, depending on the value set configuration.

The calculator icon () is displayed for each formula-driven value qualifier. Roll your mouse over the icon to view the formula associated with a value qualifier.

In this section, you can also override the values of formula-driven value qualifiers, lock them, and recalculate the values of the other value qualifiers.

Following the example in the previous section, let’s assume that you have setup the following charges to be ENTERED MANUALLY:

• DOMESTIC INLAND FREIGHT
• INSURANCE
• INTERNATIONAL FREIGHT
• BANK FEE
• BROKERAGE

You should proceed to enter the values as follows:

• Sourcing Option 1:
• • Domestic Inland Freight = 500 CNY
  • Insurance = 100 CNY
  • International Freight = 250 CNY
  • Bank Fee = 200 CNY
  • Brokerage Fee = 300 CNY
• Sourcing Option 2:
• • Domestic Inland Freight = 500 INR
  • Insurance = 100 USD
  • International Freight = 250 USD
  • Bank Fee = 200 USD
  • Brokerage Fee = 300 USD

Adding the Sourcing Details:

1. Enter the value of a value qualifier and select the currency from the corresponding drop-down list.
2. If desired, click (lock icon)  provided beside a field to lock the value of the field.

Note: By default, the lock icons are shown as open (). When you click a lock icon to freeze the value of the field, the icon is shown as closed ().

3. Click Recalculate to calculate the values of those formula-driven value qualifiers that have not been locked. (Also see Recalculate.)

Note: You can recalculate charges for as many times as you want.

4. Click Show Landed Cost to view the estimated total landed cost results of the shipment for every sourcing option. (Also see Show Landed Cost.)