Sunday, February 01, 2015

IGNOU SOLVED ASSIGNMENT: AED - 01 (2014 - 15) - DEMO

Course Code: AED - 01
Course Title: Export Procedures and Documentation
Assignment Code: AED - 01/TMA/2014-15
Coverage: All Blocks
Attempt all the questions.

Q.No.1:- What is the Significance of International Trade? Discuss the factors that motivate a firm to export.
Ans:  Meaning and Significance: International trade allows us to expand our markets for both goods and services that otherwise may not have been available to us. It is the reason why you can pick between a Japanese, German or American car. As a result of international trade, the market contains greater competition and therefore more competitive prices, which brings a cheaper product home to the consumer.

International trade is the exchange of goods and services between countries. This type of trade gives rise to a world economy, in which prices, or supply and demand, affect and are affected by global events. Political change in Asia, for example, could result in an increase in the cost of labour, thereby increasing the manufacturing costs for an American sneaker company based in Malaysia, which would then result in an increase in the price that you have to pay to buy the tennis shoes at your local mall. A decrease in the cost of labour, on the other hand, would result in you having to pay less for your new shoes.

Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies and water. Services are also traded: tourism, banking, consulting and transportation. A product that is sold to the global market is an export, and a product that is bought from the global market is an import. Imports and exports are accounted for in a country's current account in the balance of payments.


Factors that motivate a firm to export
1.       Relative Profitability: The rate of profit to be earned from export business may be higher than the corresponding rate on the domestic sales.

2.       Insufficiency of Domestic Demand: The level of domestic demand may be insufficient for utilizing the installed capacity in full. Export business offers a suitable mechanism for utilizing the unused capacity. This will reduce costs and improve the overall profitability of the firm. Recession in the domestic market often serves as a stimulus to export ventures.

3.       Reducing business risks: When a firm is selling in a number of markets, the downward fluctuations in sales in one market, which may be the domestic market, may be fully or partly counter balanced by a rise in the sales in other markets. Secondly, geographic diversification also provides the momentum to growth in as much as a single or few markets will have only limited absorptive capacity.

4.       Legal restrictions: Governments may impose certain restrictions on furthergrowth and capacity expansion of some firms within the domestic market in order to achieve certain social objectives. But there may not be any such restrictions, if the additional capacity is utilized for exports. Then the firm may be tempted to export its products abroad.

5.       Obtaining imported inputs: Nations have to pay for imports of materials, technology or processes not available within their national boundaries. Governments, therefore, may be compelled to impose export obligations on the firms, especially those in need of imported inputs. In other words, in order to import, the firms will have to export.

6.       Social responsibility: Sometimes businessmen themselves feel a sense of responsibility and contribute towards the national exchequer by increasing their exports. They also build up their image in domestic marketing by their export activities. They also look at exporting to attain status and prestige.

7.       Increased productivity: Increased productivity is necessary for ultimate survival of a firm. This will lead the firm to increase production and then move to export business. To meet the increased costs of Research and Development, larger markets become a necessity and exports become unavoidable.

8.       Technological improvement: Entry to export market may enable a firm to pick up new produce ideas and to add to product line, improve its product, reduce costs and discover new applications for its product.

Q.No.2: Explain various kinds of letters of credit in detail. Also discuss various documents required under letters of credit.
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
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CONTACT NO. 9577097967

Q.No.3: Describe various kinds of perils against which insurance cover can be obtained.
Ans: Types of Perils which are covered under Insurance
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
BECOME ONLINE LEARNING MEMBER BY PAYING A NOMINAL FEE OF Rs.300 ONLY.
SOME SOLVED QUESTION PAPERS WILL ALSO BE PROVIDED.
FOR DETAILS CONTACT:
KUMAR NIRMAL PRASAD, TINSUKIA (ASSAM)
CONTACT NO. 9577097967

Q.No.4: Differentiate between: (10×2)
A). Liner Shipping Service and Tramp Shipping Service.
Ans: Liner Shipping Service: A shipping company who transports goods in containers by sea, with a fixed route and schedule (timetable), and with a high level of cargo safety is called a Liner. This is similar to an air line or bus line (service), on a route with fixed stopping’s as per predetermined timetable. These services will continue to run irrespective of whether the airoplane/bus is full or empty as they have to strictly keep their timings and route. Similarly cargo liners too have to stick to the fixed schedule and route irrespective of whether the vessel is full or not.

Tramp Shipping Service: On the other hand, Tramp shipping is irregular shipping, mainly over nonstandard routes, with no definite schedule. Tramp ships are used to transport bulk cargoes and break-bulk cargoes of low value that do not require fast delivery. The transportation of cargoes that are picked up or dropped off along the way plays a large role in tramp shipping. Tramp ships are slow and can transport a variety of cargoes. Specialized types of dry-cargo, liquid-cargo, and mixed-cargo ships are also used in tramp shipping. Tramp shipping plays an important role in the foreign trade of the capitalist countries.

Today, the tramp trade includes all types of vessels, from bulk carriers to tankers. Each can be used for a specific market, or ships can be combined like the oil, bulk, ore carriers to accommodate many different markets depending where the ship is located and the supply and demand of the area. Tramp ships often carry with them their own gear (booms, cranes, derricks) in case the next port lacks the proper equipment for loading or discharging cargo.

From the above explanation, we got the following difference between Liner Service and Tramp Service: Liner service is a service that operates within a schedule and has a fixed port rotation with published dates of calls at the advertised ports. A liner service generally fulfills the schedule unless in cases where a call at one of the ports has been unduly delayed due to natural or man-mad causes while a Tramp Service or tramper on the other hand is a ship that has no fixed routing or itinerary or schedule and is available at short notice or fixture to load any cargo from any port to any port. One of the main differences between Liner and Tramp would be in the type of contract of carriage and Bill of Lading used. In the case of a Liner, generally the shipping line operating the liner service will have their own pre-printed bill of lading , whereas in the case of a Tramp service (which may be covered by a Charter Party), a bill of lading like the BIMCO CONGENBILL 2007 will be used depending on the cargo, charter party etc..

b) Fiscal Incentives and Financial Incentives.
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
BECOME ONLINE LEARNING MEMBER BY PAYING A NOMINAL FEE OF Rs.300 ONLY.
SOME SOLVED QUESTION PAPERS WILL ALSO BE PROVIDED.
FOR DETAILS CONTACT:
KUMAR NIRMAL PRASAD, TINSUKIA (ASSAM)
CONTACT NO. 9577097967

Q.No. 5: Write short notes on the following: (5×4).
a) Duty Drawback Scheme
Ans: The duty drawback scheme enables exporting companies to obtain a refund of Customs duty paid on imported goods where those goods will have undergone production, mixing, assembling, or packing and then exported to a foreign port. Only the person who is the legal owner of the goods at the time the goods are exported, or a person to whom this right has been assigned, is eligible to make a claim for duty drawback.
According to the Revised Kyoto Convention, the term “drawback” means the amount of import duties and taxes repaid under the drawback procedure.
 Duty drawback is provided under Section 19 of the Customs Act (No.9) B.E. 2482. It means the refund of import duty already paid or the return of guarantee placed on imports which have undergone production, mixing, assembling, or packing and then exported to a foreign port or as stores for use on board a ship proceeding to a foreign port within one (1) year from the date of importation.

b) India Trade Promotion Organisation (ITPO).
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
BECOME ONLINE LEARNING MEMBER BY PAYING A NOMINAL FEE OF Rs.300 ONLY.
SOME SOLVED QUESTION PAPERS WILL ALSO BE PROVIDED.
FOR DETAILS CONTACT:
KUMAR NIRMAL PRASAD, TINSUKIA (ASSAM)
CONTACT NO. 9577097967
c) Voyage Charter.
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
BECOME ONLINE LEARNING MEMBER BY PAYING A NOMINAL FEE OF Rs.300 ONLY.
SOME SOLVED QUESTION PAPERS WILL ALSO BE PROVIDED.
FOR DETAILS CONTACT:
KUMAR NIRMAL PRASAD, TINSUKIA (ASSAM)
CONTACT NO. 9577097967
d) International Arbitration.
Ans: International arbitration is a leading method for resolving disputes arising from international commercial agreements and other international relationships. International arbitration has enjoyed growing popularity with business and other users over the past 50 years. There are a number of reasons that parties elect to have their international disputes resolved through arbitration. These include the desire to avoid the uncertainties and local practices associated with litigation in national courts, the desire to obtain a quicker, more efficient decision, the relative enforceability of arbitration agreements and arbitral awards (as contrasted with forum selection clauses and national court judgments), the commercial expertise of arbitrators, the parties' freedom to select and design the arbitral procedures, confidentiality and other benefits.

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