An-Kee Electronics: Supply Chain Dynamics and Key Stakeholders

0 TOPIC: An-Kee Electronics Corporation Global Supply Chain Management, Conestoga College Course # or number: N0 - OPER8340 Section – 20 Prof. Saaransh Pachauri Due Date – 21/10/2023 Group members: Basil Abraham Saju (8950477) Akhil Poikkattil Das (8950437 Bansurilal Krishna (8910845) Tarun Deep Singh (8853316) Nidhi Navadiwa (8911437) Rekiat Salawa (8978263) Aathil Swothrangachalil Abdul Azeez Koyan (8950235)

1 Table of Contents: 1. Stakeholders 2. Incoterms 3. Interaction Groups 4. Commercial Invoice 5. Opening Order 6. Payment Terms

2 Question 1: Key Stakeholders: Ancaster Automotive Supply, Hana Chen, An-Kee Electronics Corporation, Owner of Ancaster Automotive Supply, Yusen Logistics, and many others are the stakeholders here, according to the e-text. These primary stakeholders in the scenario work with their own interests, roles as well and responsibilities in the business relationship between Ancaster Automotive Supply and, at the same time An-Kee Electronics Corporation. Infotainment Semiconductor Chips: In this sales transaction, infotainment semiconductor chips make up the majority of the inventory. These chips fall into three distinct categories, including NAV System Chip, AV Connectivity Chip, and Visual Display Chip. Ancaster Automotive Supply's Inventory: Ancaster Automotive Supply typically keeps these semiconductor chips in stock. At their facility in Ancaster, Ontario, Canada, they procure, import, and store these chips. On the other hand, semiconductor chips are kept in North American GMA pallets for both effective transit and storage inside car OEM warehouse racking systems.

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3 Question 2: Incoterms: CIF (Cost, Insurance, and Freight), EXW (Ex Works), and DDP (Delivered Duty Paid) are the three Incoterms in this scenario. In a CIF arrangement, the seller is liable for arranging and paying for transportation and insurance to bring the goods to a named port of destination. On the other hand, in an EXW arrangement, the seller takes the responsibility to make the goods available at their premises. Compared to others, in a DDP arrangement, the seller is liable for delivering the goods to the buyer's premises and also covering all costs, such as import duties and taxes. International Trade Norms, Cost Efficiency, Risk Management, and many more are behind selecting FCA as the best. FCA no doubt provides the right balance of control, flexibility, and at the same time, responsibility distribution in a scenario where a person wants to take an active role in arranging the transportation of semiconductor chips. Most businesses operate as interaction group types using the B2B and partnership models. Conversely, the An-Kee Electronics and Ancaster Automotive Supply Supplier Interaction Model can be thought of as the Transactional Model. In order to stimulate the beginning of the commercial partnership and demonstrate a commitment to collaborate over the long haul, An-Kee Electronics typically provides Ancaster Automotive Supply with favorable terms. Serving the automobile sector and ensuring the long-term success of this business partnership are goals that both sides share.

4 Question 3: Interaction Groups: B2B, Partnership Models are the models that most businesses use in their operations as Interaction Group Type. On the other hand, the Transactional Model can be considered as the Supplier Interaction Model for the An-Kee Electronics and Ancaster Automobile Supplies. To encourage the beginning of the commercial connection and demonstrate a desire to collaborate for the long term, An-Kee Electronics typically offers beneficial conditions to The town of Ancaster Vehicle Supply. The automobile sector is a common objective for both sides, as is the long-term success of this commercial partnership. These three Incoterms are "Provided Tax Paid," "Ex Works," and "Cost, Insurance, and Freight" in this situation. Under a CIF agreement, the provider follows the command of organizing and paying for the mobility and coverage necessary to deliver the products to the designated destination port. In contrast, the seller assumes responsibility for making the products available at their location under an EXW agreement. In contrast to other agreements, with a DDP agreement, the seller bears the responsibility of transporting the products to the buyer's location and paying for all associated expenses, including taxes and import duties.

5 Question 4: a. Infotainment Semiconductor Chips: The primary inventory in this sales transaction contains infotainment semiconductor chips. These chips are categorized into three specific types of Visual Display Chip, AV Connectivity Chip, and NAV System Chip. b. Inventory of Ancaster Automotive Supply: These semiconductor chips are usually a part of Ancaster Automotive Supply's inventory. They source, import, and warehouse these chips at their location in Ancaster, Ontario, and Canada. c. On the other hand, Storage in North American GMA Pallets: the semiconductor chips are stored for effective storage and transportation inside the automobile OEM storage racking systems, using northwestern GMA boards. SHIPPER/EXPORTER DATE COMMERCIAL INVOICE NO.

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6 An-Kee Electronics Corporation No. 18, Dahua 3rd Rd., Qidu District, Keelung City, Taiwan 206589 October 20 KTWF0004864 CUSTOMER P.O. NUMBER L9G5A2 DATE OF EXPORT October 20 COUNTRY OF ORIGIN Keelung City, Taiwan B/L / AWB NUMBER AN-KEE ELECTRONICS COMMERCIAL INVOICE CONSIGNEE Ancaster Automotive Supply 569 Jerseyville Rd. W, Ancaster, ON Canada L9G 5A2 FINAL DESTINATION West of Hamilton, Ontario, Canada EXPORT ROUTE / CARRIER Yusen logistics TERMS OF SALE: FCA FREIGHT: PREPAID ✔ COLLECT NOTIFY PARTY/ INTERMEDIATE CONSIGNEE Yusen Logistics, No. 18, Dahua 3rd Rd., Qidu District, Keelung City, Taiwan 206589 MARKS: Carrier: - Yusen logistics QUANTITY DESCRIPTION H.S. NUMBER UNIT PRICE TOTAL PRICE TWD$ 250,000 Visual Display Chip 6210 71.52 17,880,000 A) AK 3895733 300,000 AV Connectivity Chip A) AK 9937194 6210 132.73 39,819,000 200,000 NAV System Chip 6210 281.38 56,276,000 A) AK 4274095 SUBTOTAL 113,975,000 TAX 1325 FREIGHT I nsurance . 100,520 "WE, AT THIS MOMENT, CERTIFY THIS INVOICE TO BE TRUE AND CORRECT."  50% payable upon receipt of LC

7  25% payable within 120 days by bank wire transfer  The remaining 25% payable on consignment, plus 2% interest on the outstanding balance TOTAL 114,076,845 THESE COMMODITIES, TECHNOLOGY, OR SOFTWARE WERE EXPORTED FROM TAIWAN: BY THE EXPORT PERMITS AND RESTRICTIONS CONTRARY TO CANADIAN LAW. Question 5 Part Number Number Of Cases Number Of Pallets Net Weight (Kgs) Gross Weight(kgs ) Value in TWD $ Value in CAD$ AK- 3895733 2500 5 7,150.8 7,234.8 17,880,000 757,377.00 AK- 9937194 3000 6 8,580.9 8,681.7 39,819,000 1,686,689 AK- 4274095 2500 5 9,631.9 9,715.9 56,276,000 2,383,789 AK-3895733: Visual Display Chip Amount Delivered = 250,000 Cases per unit = 100 Case number= 250,000/100 = 2500 No of pallets = 2500/500 = 5 Gross Weight = 3190 lbs (1446.96 kg *5) = 7234.8 Kgs Weight of empty pallets = 16.8*5 = 84 Net Weight = Gross weight – Weight of empty boxes Net Weight = 7234.8 – 84 = 7150.8 Unit price = $71.52 TWS $ = Unit Price * Quantity = 71.52 * 250,000 = 17,880,000 AK-9937194: AV Connectivity Chip Qty Ordered = 300,000 Unit per cases = 100 No of cases = 300,000/100 = 3000 No of pallets = 3000/500 = 6

8 Gross Weight = 3,190 lbs (1446.95 kg * 6) = 8,681.7 Weight of empty pallets = 16.8*6 = 100.8 Net Weight = Gross weight – Weight of empty pallets Net Weight = 8,681.7 - 100.8 = 8,580.9 Unit price = 132.73 TWS $ = Unit Price * Quantity = 132.73*300,000 = 39,819,000 AK-4274095: NAV System Chip Qty Ordered = 200,000 Unit per cases = 80 No of cases = 200,000/80 = 2,500 No of pallets = 2500/600 = 5 Gross Weight = 4,284 lbs (1943.18 kg * 5) = 9,715.9 Weight of empty pallets = 16.8*5 = 84 Net Weight = Gross weight – Weight of empty pallets Net Weight = 9,715.9 – 84 = 9,631.9 Unit price = 281.38 TWS $ = Unit Price * Quantity = 281.38 *200,000 = 56,276,000 Check Appendix B for the exchange rate Ratio and converting from lbs to kilos. 5b) Finally, according to American GMA container requirements, just ten boxes can be put into twenty-foot containers. It has an aggregate of Sixteen boxes in this location. As a result, it can be transported in a forty-foot container. As no more than 20" boxes may be loaded, a 40- footer would be quite efficient. Furthermore, the standard GMA Pallet in the United States is typically 40" by 48". A 20-foot vessel has an allowed packed capacity of 25,400 KG OR 10 boxes. The consignment, however, weighs 25,632.4 kg all in all and consists of 19 boxes. Yusen ought to select a 40-foot vessel to transport the consignment. Check this out APPENDIX A

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9 Question 6 An-Kee Technologies provides the following financing terms: An- Kee Systems has committed to shipping the initial shipment pending reception of an Invitation of Deposit for fifty percent of the invoice value. The balance of fifty percent is divided into two parts: twenty-five percent is due in a period of 120 days by a financial institution transfer, and the balance of twenty-five percent is payable with interest of two percent when the semi-conductive circuits are sold to consumers in Ontario. 6a: Total value of Opening Order 1. Sum of values in TWD$ for each product. Visual Display Chip AK- 3895733 = 17,880,000 TWD$ AV Connectivity Chip AK-9937194 = 39,819,000 TWD$ NAV System Chip AK-4274095 = 56,276,000 TWD$ 2. Converting to Canadian Dollars. Visual Display Chip= 757,377 CAD AV Connectivity Chip= 1,68,6689 CAD NAV System Chip= 2,38,3789 CAD 6b: Value payable on letter of credit 1. 50% of order value in TWD$ Total cost of the consignment= 50% on letter of credit= Total value * 50/100 = 113975000*50/100 = 56987500. 2. Converting to Canadian dollars 2,413,928 CAD 6c: 25% Bank wire 1. Total cost of consignment*25/100 = 113975000*25/100 =28,493,750 TWD$ 2. Converting to Canadian dollars 1,206,964 CAD 6d: Remaining 25% of consignment. 1. 25% of consignment with 2% interest Total value of consignment*25/100 = 113975000*25/100 =28,493,750 TWD$ 25% of consignment*2/100 =28,493,750*2/100

10 =569,875 TWD$ Sum = 28,493,750 + 569,875 = 29,063,625 TWD$ 2. Converting to CAD 1,230,972 CAD

11 Reference: Global Value Chain (Edition 7.2). (2021). Forum for International Trade Training - Canada (FITT). https://reader.texidium.com/dist/#/book/17787?page=456

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12 APPENDIX A  https://www.icontainers.com/help/how-many-pallets-fit-in-a-container/? show=modal&creative=&keyword=&matchtype=&network=x&device=c&utm_source= google

13 Appendix B https://www.unitconverters.net/weight-and-mass/lbs-to-kg.htm https://www.oanda.com/currency-converter/en/?from=TWD&to=CAD&amount=569875 OPER8340 Term Project – Marking Scheme OPER8340-_ Group #__ Group members: Question # Marked Out of Mark Comments 1 6/ 10 2 6/ 10 3 0/ 15 4 10/ 20 5 20/ 20 6 8/ 10 Formatting (Cover page, layout, grammar, clarity, coherence, spelling, citing, referencing, etc.) 12/ 15 Turnitin deduction (up to 25 points if applicable) -25 Deduction for not following Project instructions (up to 30 points if applicable) -30 Total: 62/ 100 Assigned Course Grade Out of 25%

Gp 1 SUPPLY CHAIN GRP PRJCT ORG (1)

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