BUS141 C13 C14

A foreign trade zone (FTZ) in the U. S. is completely different in purpose from a maquiladora in Mexico.

False

Evaluation and rating systems that assign values such as excellent, very good, good, fair and poor to performance are known as objective rating systems.

False

It is easy to compare total cost of ownership from an offshore source to that of a domestic one because accurate cost data is readily available and accessible in both cases.

False

The key strategic decisions in supply management center on which supplier to pursue and what kinds of relations to maintain with suppliers.

True

The structure of a global purchasing organization is influenced by:

all of the choices (the location of the company's operations, the overall organizational structure, the location of key suppliers, the structure of the purchasing function)

Which of the following reflects a partnership approach with suppliers?

all of the choices (total cost of ownership, long term orientation, supplier and buyer sharing long and short-term cost, end-customer driven)

Reverse marketing is:

an aggressive, purchaser-initiated approach to finding and developing world class suppliers.

On the purchasing-supplier satisfaction model, if the perceptions of buyer and supplier fall along the "fairness and stability" diagonal line, this means:

both parties are at least equally well-off. Line goes from lower right hand corner (both are dissatisfied) through the mid-point (both are marginally satisfied) to the upper right hand corner (both are satisfied).

Ex-Words is an incoterm that:

buyer takes full responsibility of expenses and risks from point of origin

The primary objective(s) when nations come together and set-up regional trade agreements:

eliminate trade barriers

___________ is not one of the driver(s) for global purchasing:

excess domestic supply

supplier performance cannot be quantified or measured so it is the supply manager's best guess as to how well a supplier has performed in that period of engagement.

False because it is the duty of a supply manager to measure the performance of a supplier to ensure the proper supply of the goods or services. A good relationship between the supplier and the management can only survive when both perform well as per the need of each other.

An FTZ (Foreign Trade Zone) is commonly located in the heart of the city so products stored can be delivered to end customers efficiently.

False An FTZ (Foreign Trade Zone) is located near a port of entry. Legally, an FTZ is located outside the customs territory of the USA. A port of entry is a location where a person or good can lawfully enter a country. International airports, rail crossings, and roads can be the port of entry. Seaports can also be ports of entry when the customs officials are present in the area. The ports of entry also have port directors in the USA. Any good product that is located in an FTZ has not cleared the customs. The foreign free trade zones are not only areas where goods are imported and stored. They can also be the areas where goods are manufactured, handled, reconfigured, or re-exported under the regulations laid by custom authorities. Therefore a foreign trade zone is not located in the heart of the city but at a distance from it.

Assume you are the global supply manager for a Fortune 500 manufacturing firm and is preparing for a meeting with your VP Supply to discuss sourcing globally. In preparation for this meeting, you are required to identify the principal advantages ( not more than 5 ) to be gained when your firm buy globally?In addition, identify the principle disadvantages ( not more than 5).

SHORT ANSWER + more suppliers + more option + can do reverse auctions to remove overpriced suppliers. + cheaper electricity, water + cheaper labor (sweatshop) + cheaper facility maintenance + no environmental cost such as carbon tax - communication, no English speaker - local law - disaster - transportation delay (custom, war, ship sink) - quality control - time consuming to train local staff - harder to monitor and audit - managers can be overpowering, act unethically - under table trade - unethical environmental practices such as dumb direct to ocean without treatment facility due no requirement specific from local government. - Price tag, likely less value than Made In USA - required additional cost to establish overseeing team - timezone, hard for collapse meeting, technical support can't be available when needed, delay in workflow LONG ANSWER Global sourcing has a number of benefits. For starters, it allows the company to increase its manufacturing capacity. Second, organizations obtain an innovation advantage faster than their competitors. Companies can benefit from lower manufacturing costs owing to lower labor expenses in other nations. Additionally, businesses may save energy and time that might otherwise be spent on brand development. Despite the obvious advantages of global sourcing, it also has a number of drawbacks. To begin with, global sourcing often expands a company's supply chain. The second drawback is that there is a significant likelihood of communication difficulties arising as a result of failures in communication. Finally, quality control has become an issue as a result of various offshore manufacturers that do not fulfill the company's requirements. Global sourcing is a procurement method in which companies acquire services and commodities from worldwide marketplaces beyond geopolitical borders in order to save money by, for example, employing economical raw materials and producing at a low cost owing to the availability of cheap labor. Many firms benefit from global sourcing since it allows them to access resources, technology, and sophisticated talents that aren't accessible locally. Global sourcing has a number of benefits. For starters, it allows the company to increase its manufacturing capacity. Companies may obtain their products from low-cost nations like China through global sourcing. A company may benefit from China's well-developed manufacturing infrastructure. This will allow the corporation to swiftly generate big quantities of items at a lesser cost. Second, organizations obtain an innovation advantage faster than their competitors. Companies may take advantage of emerging nations like China, which provide a low-cost opportunities for product creation on a large scale. Furthermore, by acquiring in low-cost nations, global sourcing allows organizations to maintain consistent value. Companies can benefit from lower manufacturing costs owing to lower labor expenses in other nations. Additionally, businesses may save energy and time that might otherwise be spent on brand development. Despite the obvious advantages of global sourcing, it also has a number of drawbacks. To begin with, global sourcing often expands a company's supply chain. As a result, when the supply chain is extensive, there is greater possibility for mistakes such as transportation delays, manufacturing shutdowns, and other concerns. The second drawback is that there is a significant likelihood of communication difficulties arising as a result of failures in communication. Global sourcing also causes customers to lose faith in the product, which may lead to a loss of client loyalty. Finally, quality control has become an issue as a result of various offshore manufacturers that do not fulfill the company's requirements.

Strategic supply management is founded on the conviction that a significant competitive edge can be gained from the suppliers an organization has developed and its supply systems and supplier relations.

True

Bonded warehouses allow the importer to be exempted from paying duty on foreign manufactured products that will be re-exported.

True

Duty drawbacks permit a refund of duties paid on imported materials that are later exported.

True

Incoterms defined the responsibilities of a buyer and seller in a transaction

True

Trends in supply management include:

limiting the number of suppliers and focusing on results from key suppliers

When sourcing offshore, a buyer:

must have extensive knowledge and analysis of the country

The supplier evaluation process that includes: (1) factors or criteria for evaluation, (2) the importance of each factor, and (3) a system for rating each supplier on each factor is called a(n):

weighted point evaluation. A weighted point system includes a pre-established set of evaluation criteria with weight (which signify importance) assigned to each. For example, the weights assigned to each criterion must equal 100 percent. The goal is to increase the probability that the process is unbiased