Question: Global Logistics & Supply Chain
Your company has decided to export to an Indian distributor. A major concern you have is getting paid by this distributor. You have asked the distributor to use irrevocable letters of credit.
a. Discuss the non-payment risks involved.
b. Describe in step-by-step detail how payments in an irrevocable letter of credit works?
c. Explain how an irrevocable letter of credit helps to minimize the risk of non-payment?