Case Study - Insource or Outsource - AMAZING ACE COMPANY Amazing Ace is a small start-up in Waterloo, Ontario. The company has developed a drone (an Unmanned Aerial Vehicle) with some highly engineered capabilities. Their drone technology is considered cutting edge and is protected under a Canadian patent to protect their intellectual property. Amazing Ace has found that demand is growing at a faster pace than its current manufacturing capacity in Waterloo. So, they are at a crossroads and need to make a decision on whether to (1) continue to build manufacturing capacity in Waterloo, or (2) find a global supplier Supply Chain has not been a strength for Amazing Ace. Their core competency is engineering the drones. At a Communitech event they heard about the "Supply Chain and Operations Management" and "Business Purchasing" programs at Conestoga. They decided to contract a current graduate - you - to help them evaluate this sourcing decision based on a financial and a potential risk assessment, and to make a recommendation on what Amazing Ace should do. As that graduate student, you did some research and found 3 additional potential suppliers. You now have the following information: SUPPLIER 1 is located in Harbin, China. The company manufactures drones for other companies. They provided the results of a customer survey in which most were very happy with their service. They currently have lots of capacity along with low labour costs, but Harbin is located inland in China and the roads to the port can get very congested. A (hp minimum of 100 drones needs to be ordered at one time. The cost is $5100 Canadian per unit delivered to the airport in China. Shipping costs from there to Waterloo are estimated at $50 per unit. SUPPLIER 2 is located in Hamburg, Germany. This supplier has won many awards for quality and excellence in engineering. They currently are constrained by capacity, but are in the process of building a larger facility which will be ready in February 2022. The cost of the product cleared through Canadian customs to a freight forwarder in Montreal is 3900 Euros per unit. SUPPLIER 3 is a brand-new company located in Sao Paulo, Brazil. The owners were International students that graduated from the Conestoga College Engineering Degree program. They returned to Brazil to start their own business which has been running for 3 years. They have lots of capacity. Customer ratings at start-up were not great, but they seem to be improving. The cost of the drones would be 11,800 Brazilian Real per unit delivered to the airport in Brazil. Shipping costs from there to Waterloo are estimated at $25 per unit, They are willing to ship direct to any customer on behalf of Amazing Ace. AMAZING ACE itself can manufacture and supply the drones for about $6000 Canadian per unit at their Waterloo facilities. Exchange Rates: An online currency converter showed the following conversion rates: 1 CDN=0.7 Euro 1 CDN= 2.35 Brazilian Real 1 CON= 5.14303 CNY QUESTIONS (following) 1. Analyze the 3 suppliers that you are considering (along with Amazing Ace) in terms of costs and risks. (15 marks) 2. What is your recommendation to Amazing Ace? (3 marks) hp 1. Analyze the 3 suppliers that you are considering (along with Amazing Ace) in terms of costs and risks. (15 marks) 2. What is your recommendation to Amazing Ace? (3 marks) Harbin, China Hamburg, Germany Sao Paulo, Brazil Waterloo, Canada COSTS SUPPLIER INFORMATION & Benefits, Risks, Concerns CRITICAL THINKING Question 30 (15 points) Case - Insource or Outsource: Analyze the 3 suppliers that you are considering (along with Amazing Ace) in terms of costs and risks. Please show any calculations for full marks. (15 marks) (Chinese. German Brazilian and Canadian suppliers] Paragraph A hp COCO Vioco Question 31 (3 points) Case - Insource or Outsource: What is your recommendation to Amazing Ace? (3 marks) Paragraph UA v OP + Add a File Record Audio Record Video Previous Page Next Page Page 18 of 18 hp fs ? & 3 4 5 6 7 8 2