• Korean small business review
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• v.31 no.2
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• pp.85-102
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• 2009

With the continued globalization of world markets, transfer pricing has become one of the dominant sources of controversy in international taxation. Transfer pricing is the process by which a multinational corporation calculates a price for goods and services that are transferred to affiliated entities. Consider a Korean electronic enterprise that buys supplies from its own subsidiary located in China. How much the Korean parent company pays its subsidiary will determine how much profit the Chinese unit reports in local taxes. If the parent company pays above normal market prices, it may appear to have a poor profit, even if the group as a whole shows a respectable profit margin. In this way, transfer prices impact the taxable income reported in each country in which the multinational enterprise operates. It's importance lies in that around 60% of international trade involves transactions between two related parts of multinationals, according to the OECD. Multinational enterprises (hereafter MEs) exert much effort into utilizing organizational advantages to make global investments. MEs wish to minimize their tax burden. So MEs spend a fortune on economists and accountants to justify transfer prices that suit their tax needs. On the contrary, local governments are not prepared to cope with MEs' powerful financial instruments. Tax authorities in each country wish to ensure that the tax base of any ME is divided fairly. Thus, both tax authorities and MEs have a vested interest in the way in which a transfer price is determined, and this is why MEs' international transfer prices are at the center of disputes concerned with taxation. Transfer pricing issues and practices are sometimes difficult to control for regulators because the tax administration does not have enough staffs with the knowledge and resources necessary to understand them. The authors examine transfer pricing practices to provide relevant resources useful in designing tax incentives and regulation schemes for policy makers. This study focuses on identifying the relevant business and environmental factors that could influence the international transfer pricing of MEs. In this perspective, we empirically investigate how the management perception of related variables influences their choice of international transfer pricing methods. We believe that this research is particularly useful in the design of tax policy. Because it can concentrate on a few selected factors in consideration of the limited budget of the tax administration with assistance of this research. Data is composed of questionnaire responses from foreign firms in Korea with investment balances exceeding one million dollars in the end of 2004. We mailed questionnaires to 861 managers in charge of the accounting departments of each company, resulting in 121 valid responses. Seventy six percent of the sample firms are classified as small and medium sized enterprises with assets below 100 billion Korean won. Reviewing transfer pricing methods, cost-based transfer pricing is most popular showing that 60 firms have adopted it. The market-based method is used by 31 firms, and 13 firms have reported the resale-pricing method. Regarding the nationalities of foreign investors, the Japanese and the Americans constitute most of the sample. Logistic regressions have been performed for statistical analysis. The dependent variable is binary in that whether the method of international transfer pricing is a market-based method or a cost-based method. This type of binary classification is founded on the belief that the market-based method is evaluated as the relatively objective way of pricing compared with the cost-based methods. Cost-based pricing is assumed to give mangers flexibility in transfer pricing decisions. Therefore, local regulatory agencies are thought to prefer market-based pricing over cost-based pricing. Independent variables are composed of eight factors such as corporate tax rate, tariffs, relations with local tax authorities, tax audit, equity ratios of local investors, volume of internal trade, sales volume, and product life cycle. The first four variables are included in the model because taxation lies in the center of transfer pricing disputes. So identifying the impact of these variables in Korean business environments is much needed. Equity ratio is included to represent the interest of local partners. Volume of internal trade was sometimes employed in previous research to check the pricing behavior of managers, so we have followed these footsteps in this paper. Product life cycle is used as a surrogate of competition in local markets. Control variables are firm size and nationality of foreign investors. Firm size is controlled using dummy variables in that whether or not the specific firm is small and medium sized. This is because some researchers report that big firms show different behaviors compared with small and medium sized firms in transfer pricing. The other control variable is also expressed in dummy variable showing if the entrepreneur is the American or not. That's because some prior studies conclude that the American management style is different in that they limit branch manger's freedom of decision. Reviewing the statistical results, we have found that managers prefer the cost-based method over the market-based method as the importance of corporate taxes and tariffs increase. This result means that managers need flexibility to lessen the tax burden when they feel taxes are important. They also prefer the cost-based method as the product life cycle matures, which means that they support subsidiaries in local market competition using cost-based transfer pricing. On the contrary, as the relationship with local tax authorities becomes more important, managers prefer the market-based method. That is because market-based pricing is a better way to maintain good relations with the tax officials. Other variables like tax audit, volume of internal transactions, sales volume, and local equity ratio have shown only insignificant influence. Additionally, we have replaced two tax variables(corporate taxes and tariffs) with the data showing top marginal tax rate and mean tariff rates of each country, and have performed another regression to find if we could get different results compared with the former one. As a consequence, we have found something different on the part of mean tariffs, that shows only an insignificant influence on the dependent variable. We guess that each company in the sample pays tariffs with a specific rate applied only for one's own company, which could be located far from mean tariff rates. Therefore we have concluded we need a more detailed data that shows the tariffs of each company if we want to check the role of this variable. Considering that the present paper has heavily relied on questionnaires, an effort to build a reliable data base is needed for enhancing the research reliability.

• Proceedings of the IEEK Conference
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• 2000.06b
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• pp.213-216
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• 2000

Minimum-cost linear network flow problems could be transformed with equal to assignment problems. Traditional method to solve the linear network flow problems are improved source-cost by transform the simple cycle flow. Auction algorithm could be applied to same element using the initial target price and dispersion calculation. Also, each elements are obtained by $\varepsilon$-relaxation methods. In this paper we proposed; 1)minimum-cost flow problem, 2)minimum-cost flow problem by the mathematical equivalent and 3) extraction $\varepsilon$-relaxation & expand transfer problem with minimum-cost flow. It can be applicant to PCB design by above mentioned.

• Journal of the Korean Society for Aviation and Aeronautics
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• v.19 no.4
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• pp.91-98
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• 2011

Korea's aerospace industry tries to achieve the exports goal in 2020, 10 billion dollars, in accordance with the "Future aviation industry development master plan", but it's skill is still not keeping pace. To secure and improve the appropriate technology, it is desperately needed to cooperate with advanced countries or companies of aerospace industry, but they are liked to manage their technology transfer or demand tremendous high price. This study presents that Russia could be a another nation which is able to cooperation on aerospace industry. Although Russia had have superior technology in aerospace industry, they have lost the competitiveness on that field after the collapse of the Soviet Union. Now, they are trying to regain their original fame in the commercialized way. So, this study suggests practical ways which South Korea and Russia may be helpful each other based on experiences working together.

• Transactions of the Korean Society of Automotive Engineers
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• v.10 no.5
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• pp.23-28
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• 2002

As the interest on the air pollution is gradually rising up at home and abroad, automotive industries have been working on the exhaust emission reduction from vehicles through a lot of approaches, which consist of new engine design, innovative aftertreatment systems, and using clean fuels. Methanol, ethanol, LNG, LPG, H2, reformulated gasoline are generally recognized as the clean fuel. Since the low price policy of government on LPG has expanded its vehicle market recently, there is concern of the exhaust emission of LPG vehicle. In this paper, we studied the value of LPG fuel as a clean fuel by comparing the results of the exhaust emission from LPG and Gasoline fueled vehicles, and discussed its limitation of LPG vehicle with mixer type as a fuel supply system. FTIR was used to understand the difference of exhaust emission components of LPG and Gasoline fueled vehicles.

• Journal of the Korean Professional Engineers Association
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• v.24 no.5
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• pp.9-14
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• 1991

To date Korean electronic industry has held a position of the first rank both in productions and exports among the nation's industries. However, it is gradually losing its competitive foundation in the world market owing both to the weakening in price competition by least developed among developing countries(LDDC) and to the lack in technological competition with industrially advanced countries. Specifically it is worried about an industrial subordination to industrially advanced countries owing to an evasion of components supply, control of amount of materials, and the evasion of kernel technology transfer etc. As the condition has developed, both the government and the electronic industry in July of this year came to jointly establish a research and development center for electronic components for the purpose of rehabilitating the electronic industry and accordingly strengthen the export industry which has been and continuance to be vital to our nation.

• Proceedings of the KIEE Conference
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• 2000.07a
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• pp.279-281
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• 2000

In this paper, we propose that the security-constrined optimal power flow (SCOPF) be solved in a decentralized framework, consisting of regions, using a price-based mechanism. We first solve the distributed OPF problem to determine the maximum secure simultaneous transfer capability of each tie-line between adjacent regions by taking only the security constraints imposed on the tie-lines into account. And then, the regional SCOPF is performed using the conventional LP approach. A description on the inclusion of security constraints with distributed OPF algorithm will be given, followed by a case study for Korea power system.

• IE interfaces
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• v.21 no.3
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• pp.343-353
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• 2008

Vendor-managed inventory(VMI) is a supply chain strategy to improve the inventory turnover and customer service in supply chain management. Unfortunately, many VMI programs fail because they simply transfer the transactional aspects of placing replenishment orders from customer to vendor. In fact, such VMI programs often degrade supply chain performance because vendors lack capability to plan the VMI operations effectively in an integrated way under the dynamic, complex, and stochastic VMI supply chain environment. This paper presents a decision support system, termed DSSV, for VMI in the retail supply chain. DSSV supports the market forecasting, vendor's production planning, retailer's inventory replenishment planning, vehicle routing, determination of the system operating parameter values, retailer's purchase price decision, and what-if analysis. The potential benefits of DSSV include the provision of guidance, solution, and simulation environment for enterprises to reduce risks for their VMI supply chain operations.

• The Transactions of the Korean Institute of Electrical Engineers A
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• v.49 no.6
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• pp.298-304
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• 2000

In this paper, we propose that the SCOPF be solved in a decentralized framework, consisting of regions, using a price-based mechanism. We first solve the distributed OPF problem to determine the maximum secure simultaneous transfer capability of each tie-line between adjacent regions by taking only the security constraints imposed on the tie-lines into account. And then, the regional SCOPF is performed using the conventional LP approach. A description on the inclusion of security constraints with distributed OPF algorithm will be given, folowed by a case study for Korea power system.

• Journal of the Korean Society of Manufacturing Technology Engineers
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• v.26 no.2
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• pp.257-261
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• 2017

Drilling file is medical mini-drill which is made of Ni-Ti material and has tapered shape. It's for removing teeth nervine which helps the endodontic treatment. All files, saled at domestic market, are imported from U.S. and Europe. Also they have low manufacturing efficiency and high price because it is made by universal 5 axis CNC grinding machine. To solve these problem, 3 axis CNC table, controllable tilting angle spindle and helix angle moving table are devised. To confirm divised CNC grinding machine's manufacturing accuracy, conveying amount and finish product size measurement expreiment has been practiced. Also to automate all manufacturing processes, automatic mechanism is designed.

• Journal of the Korean Graphic Arts Communication Society
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• v.24 no.2
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• pp.69-78
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• 2006

Proofing is one of the inspection operations of printing and can be considered a process control step. The three main kinds of proofs are press proofs, photomechanical proofs, and digital proofs. Photomechanical and digital proofs are also generally refered to as "off-press" proofs. Off-press color proofs are more economical than press proofs. Digital proofs offer fast production time along with a much lower cost per page. Hard-copy digital proofs can be output using thermal transfer printers, ink jet printers, and color laser copiers, as well as dye sublimation and electrophotographic technology. Ink jet method is commonly using because of the reasonal price. But ink jet system is difficult to reproduce an exact color proof. This research was carried out for the purpose of optimization of ink jet color proofing, using two kinds of ink jet printers with 6 colors (C, M, Y, K, mC, mM) and 4 colors (C, M, Y, K) system.