Question

Discuss the method of computation of assessable value for calculation of custom duty

Answer 1

Customs duty assessable value is the total of:

CIF value of item in local currency. This is the sum of total FOB item value, freight, insurance, and other charges.

Landing charges. This is 1 percent of the CIF item value. The user can change this amount on the BOE.

Any previously applied customs duties.

Answer 2

Safety stock = Z-score x standard deviation of lead time x average demand. For example, if aiming for a Z-score of 1.65, with average demand constant at 20 units per month, and lead times over a six month period being 2, 1.5, 2.3, 1.9, 2.1, and 2.8 months, then Safety Stock = 1.65 x .43 x 20 = 14.3 units.