MDSE 4010 Global Sourcing - Comprehensive Final
What is it called when changes in design or tracking of products are instantaneously and continuously available to all individuals involved, whether they are in the next room or across several continents?
Real-time communication
Exporters must prepare and present the merchandise appropriately labeled and prepare and submit customs forms and reports according to customs rules and regulations in each importing country.
True
Globalization means the lives of individuals around the world are more interconnected than ever before.
True
In order to safely and correctly claim that an item has been recycled, the source of the waste must be verified.
True
It is an industry norm to build in 5 to 50% additional cost to FOB to prepare for unexpected indirect costs.
True
It is necessary to sacrifice some profit in order to be truly engaged in CSR.
True
Low-cost labor is still regarded as an economic necessity for apparel production.
True
Making samples in the factory results in cost savings as well as helps the factory anticipate problems.
True
Most countries in Central America have ample CMT but not many full-package factories.
True
Off-price retailers are a variation of the specialty store format.
True
One of the reasons why global sourcing continues to grow, besides lowering costs, is that the options increase greatly when sourcing globally.
True
Overall, global sourcing and FTAs have served to improve economic conditions around the world, especially in newly developing and developing nations.
True
Religion, not business, rules the basic patterns of the day in most nations in this region.
True
Tariffs are used to restrict trade and to accumulate revenue for the government.
True
Technology is expensive, but it made it possible to go global and pursue low cost labor around the world.
True
Textiles and apparel traditionally have a high level of trade protection throughout the world.
True
The EU textile and apparel sector is a small and medium enterprises (SME) based industry as companies of less than 50 employees account for more than 90% of the workforce and produce almost 60% of the value added.
True
The U.S. Customs and Border Protection is responsible for collecting tariffs on imported goods.
True
The challenge of creating a code of conduct for social responsibility lies in the complexity of the textile and apparel supply chain including the many languages, varying cultural traditions, resource availability and infrastructure.
True
From Table 9.2, which European country in the EU is the poorest (based on GDP per capita)?
Romania
Which of the following is a trade organization of brands, retailers and manufacturers, government and nongovernment (NGOs) organizations and academic experts with a focus on creating common metrics and approaches to reduce the social and environmental impacts of apparel and footwear products around the world?
SAC
A living wage is the level of income that __________.
Satisfies basic needs such as maintaining good health
Quality assurance is important to global sourcing because it _____.
Seeks to prevent defects and plans to make the product correctly.
Hong Kong's primary business in the textile and apparel industry is now ___________.
Servicing (import/export) and sourcing
Which city in China has the largest population with over 22 million?
Shanghai
Based on Table 9.4, what statement is NOT true about the EU textile and apparel trade?
Share of textile and apparel imports in total merchandise imports has been around 10%.
What is one of Australia's top exports?
Sheep's wool
Which sourcing factor primarily depends on an exporting country's geographic location?
Shipping time to a destination market
Why is it difficult for small-to-medium businesses to become suppliers of huge retailers?
Small businesses cannot supply the volume needed for huge retailers.
How is it possible for textile or apparel production to increase while employment decreases? Which one is the best answer?
Smarter technology
The majority of the world's apparel production is NOT taking place in the countries with the lowest labor cost. T/F
True
A more privatized market-oriented economy that promotes trade and growth, while still restricting the freedoms of individuals is known as a __________.
Socialist-capitalist economy
What is another term used to describe products made of textiles or other flexible materials including fabrics, apparel, linens, towels, upholstery and small fashion accessories?
Soft goods
Which one of the following is NOT a typical company involved in apparel importing?
Sourcing agent
"Outsourcing" tends to have a negative connotation today as it implies a loss of jobs in the domestic market
True
Which one of the following levels of economic development is a country likely to be in when transitioning between a focus on apparel production to a focus on apparel consumption?
developing
Which one of the following levels of economic development is a country likely to be in when transitioning between a focus on apparel production to a focus on apparel consumption?
developing
How many nations are considered to be Sub-Saharan Africa (SSA)?
49
Turkey has been seeking to become which of the following?
A member of the EU
A method used to restrict quantities of certain types of goods that can be imported or exported is called:
A quota
An example of a closed-loop system is _____________.
A recovery of polyester fiber from secondhand garments to make new fabric
Fair trade is _________.
A trading partnership that secures the rights of marginalized workers
What is a PEST?
Analysis of the political, economic, social and technological status of a country.
What is a major focus of newly developing countries in the textile and apparel supply chain?
Apparel assembly
Komar is an example of _______________.
Apparel intermediary
What happens in the 3rd level of the textile complex?
Apparel is made.
Why did employment in textiles in the US decline from 1950 to 1980?
Application of new technology
What is the term used for the administrative system leading any large instruction or government which determines how easy it is to do business in a country?
Bureaucracy
What is the main idea behind CSR?
Businesses have a responsibility to various groups in society
When importing apparel to the United States, import duty is commonly paid by ____.
Buyer, or importing company
In 2013, the two nations in Asia with the largest exports of apparel products were ____.
China and Vietnam
Other than ________, no other country compares to the size and depth of the _______ textile and apparel industry.
China, Indian
The number of yards of fabric required to produce a complete garment is called the ___________.
Consumption
Although it's not easy to predict risk, some risks are obvious. What kinds of plans might sourcing managers have in case of a disaster?
Contingency plans
Which dimension of intellectual property covers literary, musical and artistic works and software and gives the owner of the creative work the right to keep others from using it without permission?
Copyright law
Obligation of businesses toward communities and the society in which they operate is __________.
Corporate social responsibility
Classification of textile and apparel articles is generally determined by all of the following except:
Cost
Bangladesh is a considered best for sourcing which of the following?
Cotton garments of basic design and standard quality
Processing of waste so it can be marketed as raw materials for new products is ___________.
Recovering
What is the most important reason why private brand ownership is a good strategy for a retailer?
Reduces costs
When calculated, the Global Competitiveness Index does NOT take into consideration which of the following?
Religious and cultural values and norms
What is an RSL?
Restricted Substances List—a list of restricted or banned chemicals
An apparel intermediary typically performs all but one of the supply chain functions listed below. Which one do they not do?
Retails its own apparel lines to consumers
Although the terms "global" and "international" are frequently used interchangeably, one goes beyond the other and has a much broader meaning and implies a more comprehensive perspective. Which one?
Global
"Global sourcing follows the trends." What does this mean?
Global sourcing must know the trends in order to maintain the right suppliers.
A term which recognizes the global aspect of the supply chain is which of the following?
Global value chain
How might a sourcing professional be able to determine if a factory has human rights violations?
Go to WRAP.
Another issue in trademarking and in sustainability is the issue of production overruns sold on the side. These are sometimes known as the _______________.
Gray market
How does the consumer benefit from global sourcing?
Greater selection and lower prices
What is the main factor in determining the level of a country's economic development?
Gross Domestic Product per capita
The important of connections and personal relationships when working within China or other Asian nations is known as ____.
Guanxi
The top fashion retailer in Europe is ______________.
H&M
Select one statement that does NOT apply to the Harmonized System (HS).
HS applies only the US and the EU.
Because the U.S. stills records measurements in the English system while the rest of the world uses the metric system, what did the U.S. convert to in order to trade with the rest of the world?
HTS (Harmonized Tariff Schedule)
The poorest nation in the Western Hemisphere is _________.
Haiti
Countries who aspire to become WTO members will use which of the following so that the WTO has useable import and export data which can be reported and compared?
Harmonized Commodity Description and Classification System (HS)
In the "12 Tips for Sourcing Your Product" what is the last tip?
Have a backup plan
What to textile product mills produce?
Home furnishings such as carpets, bedding, towels, and curtains
Historically, after Japan's productions costs increased, which "Big Three" countries took over the position of leading exporters of low-cost apparel?
Hong Kong, Taiwan and South Korea
To which decision does "make or buy" refer?
Make it internal or have it made external to the company
A code of conduct is an expression of corporate social responsibility.
True
Apparel companies may gain a competitive advantage by building strong supply chains.
True
By reducing or removing risks, a company may save on costs; for example, by sourcing fabric which is nearby or local to the manufacturer, shipping costs are reduced and late delivery risk is lowered.
True
By using PLM, garment information can be available to all supply chain participants, from a brand manager to factory, logistics firm to retailer.
True
Canadian garment makers have become experts at producing small runs of their products since the domestic market is small, but US firms are better at supplying mass retailers.
True
Classifying products using the HS is not easy or straightforward because there are many individual decisions about garments called 'rulings'; a knit shirt is not necessarily a knit tshirt or knit blouse.
True
Companies who source in least developed or newly developing countries provide the means to improve the economy and raise their standard of living.
True
Ethics exists only among people, not business organizations.
True
What is the correct definition of 'specifications'?
provides detailed description and graphic representation of a garment for production purposes
What is the definition of "sourcing"?
the selection of the most appropriate countries and vendors when building a supply chain to meet your business needs
According to the article "Digitize or Die" from Sourcing Journal Online, what would 'digitizing' the supply chain do for retail?
~Eliminate administrative work including "track and trace" which takes an immense amount of time in the sourcing process ~Increase supply chain visibility ~Reduce costs
Textile industry employment in the United States peaked in the ____.
1950s
The decline in the number of US apparel workers began in the ___.
1980s
The EU was established in ______.
1993
There are said to be three great periods of history where "the world became smaller" and more globalized: Globalization 1.0, 2.0 and 3.0. Which one included electronic communication and the Internet?
2.0
How many time zones are there in the world?
24
What made it possible for sourcing to become globalized?
Digital technology
The only goal of sourcing is to find low-cost labor.
False
France maintains leadership in the marketing of _____.
Fashion-forward fabrics
In, 2015, how many countries were members of the EU?
28
What does FOB mean?
"Free on Board": the cost of goods and the cost of loading them onboard a vessel at the foreign port of export
Despite having super billionaires in Saudia Arabia, what is the GDP per capita in US dollars?
$52,800
Why is knowing the culture important?
-Because they may have a different perception of time. -Because they may place a different meaning on how to honor a contract. -Because they may say 'yes' just to 'save face'.
Why is the Whole Garment knitting system special in the industry of Japan?
-Garments cannot be replicated at a lower cost. -It allows one worker to operate 10 machines—thereby lowering labor costs. -It uses limited raw material to create seam-free garments that generate no waste, since they require no cutting or sewing.
Why is the bureaucracy of a country important to global sourcing?
-It efficient, it ensures clear and transparent procedures for exporting and importing. -If excessive, it results in unnecessary delays, stagnation of business operations, increased costs.
How can importers shorten their lead time when sourcing from overseas?
-Source domestically -Source near-shore, perhaps in the Americas -Own the factory, like Zara -Use fabric that is in stock
Why is it important to stay current with events around the world and know if there is social unrest or other issues going on in a country?
-To avoid disruptions in the production schedule and ensure timely delivery of finished goods. -To avoid travel to places where it is not safe.
What is one of the trends in China in regards to manufacturing?
-To consolidate their production within self-contained cities -To produce very labor-intensive products -The availability of labor is becoming a problem.
Why do sourcing organizations prefer that the factory take ownership of all the materials by negotiating, ordering and owning them?
-When the factory invests money in your order and owns the materials, the factory is much more likely to take excellent care of the materials and ensure that quality is high. -It also makes negotiations about quality or late shipments easier. -The factory is responsible for the timing of the materials.
How many American countries generate a per capita GDP that is higher than the US?
0
If the P.O. is for 120,000 total units, two styles (75% full-length pants and 25% capri-length), 3 colors (White, Red, Yellow—same amount of each color), size ratio of S-M-L-XL = 1-2-2-1, how many full-length pants in white need to be made in size L?
10,000
Companies who have implemented PLM have reduced time required for product development by at least _______ percent.
50
What percentage of EU textile and apparel production is sold intra-EU?
80%
How many imported goods are physically examined by customs inspectors?
<1%
What is Gross Domestic Product?
A and B, A yardstick of economic activity, and The market value of the final output of goods and services produced within a country in a year
Why does excess inventory exist?
A and B, It didn't sell—either it didn't sell at clearance in the store or it never left the warehouse, and Buyers deliberately order extra inventory because it is not possible to reorder quickly enough from overseas.
What is dumping?
A and B, It's a form of unfair competition, and It's disposal of unwanted goods.
What happens when governments create too much regulation?
A and B, Stifles initiative and innovation, and Creates barriers to new business
Why is it difficult to measure Sourcing's contribution to the company?
A and C, Sourcing is highly interdependent with other functions and it's not easy to isolate what they did. There isn't one specific set of criteria for evaluation for Sourcing
What is the NAICS?
A classification system based on the Harmonized System (HS)
What is the definition of a cost center in a business?
A cost center is essential to the operation of the business but produces no profit.
China is which of the following?
A developing nation
An ad valorem tariff is:
A fixed percentage of the value of the product.
Which one of the following is an example of a trade association?
AAFA
What FTA was most recently renewed with Sub-Saharan Africa (SSA)?
AGOA
Which statement is NOT true about the African Growth and Opportunity Act (AGOA)?
AGOA covers all African nations.
What disease and other issue continues to hamper improving the general economics of populations in SSA?
AIDS, corruption
China's fastest growing export market is now the __________ region, which increased by 30.15 percent, making the region China's third largest apparel export market.
ASEAN
What is the most important quality a supplier can offer today?
Ability to manage continual change
Taking into account both the cost to export merchandise and shipping rates, which region is the most expensive when importing goods from the region to the United States?
Africa
Which FTA has a main goal of assisting SSA in achieving economic self-reliance by providing duty-free access to the U.S. and has gone through 6 updates since 2000?
African Growth and Opportunity Act
An operational strategy focused on inducing speed and flexibility in a made-to-order production process with minimal changeover time and interruptions is called which of the following?
Agile manufacturing
What is the issue being addressed in Case Study 9.1?
Aging and low birth rate
What statement about APEC (Asia-Pacific Economic Cooperation) is NOT correct?
All APEC members are Asian countries
Measures of fairness in human rights focus on ____.
All of the above, ~Fair wages with gender equity ~No child labor ~Healthy working conditions
What do some sustainability experts mean when they suggest that the language of color should change?
All of the above, ~New apparel should only be sold in pastel and medium colors, because that will save a lot of water, time and energy. ~Only recycled clothing should be deep and bright colors since it's easier to dye over the pale/medium colors and save water, time and energy. ~Only security applications should use fluorescent dyes
Where might a company look for technology solutions for all aspects of the apparel business?
All of the above, Apparel magazine's "Buyer's Guide", Trade fairs, Networking with vendors
Vendor compliance establishes what kinds of rules?
All of the above, How business is conducted, including EDI and payments, That labor is being paid a reasonable wage and conditions at the factory are safe and ethical, Manufacturing processes, timing of deliveries, and RSLs
Why is the number of internet users reported today?
All of the above, Indicator of the level of overall technology development, Indicator of the online retail, Indicator of business
Why is the apparel industry one of the first to enter developing countries?
All of the above, It is labor-intensive and not capital-intensive, It requires little training, It doesn't require a knowledge of the language to be a worker.
What is the ethical dilemma of sourcing from a newly developing nation like Bangladesh?
All of the above, It provides jobs but there's so much work to be done to ensure safety, The women work 12 hour days and it's very little pay but it's enough to send even the girl children to school, In Bangladesh, product can be made very cheaply, but sourcing may be a risk to the company when there is so little transparency.
Why is verifying that all material and labor inputs were not involved in sweatshop labor so difficult?
All of the above, It requires more money to hire an independent agency to watch all the inputs, The sheer number of suppliers—from farm, to ginner, to yarn spinner, to commodity, traders, to textile mills, wet processing, chemical providers and more to be verified, And yet still, people can be fooled.
Why are social costs a serious concern in the EU?
All of the above, It's a source of corruption, It's a significant portion of the labor wage; few manufacturers can pay wages that high for making textiles or apparel.
What is the current meaning of "substantial transformation" in regards to COO?
All of the above, The country where product transformation resulted in a change of tariff category, The country where the greatest value was added to the product.
Why do opponents of global sourcing argue that it hurts nations?
All of the above, Unscrupulous people take advantage of workers, Sourcing follows the cheapest labor leaving workers unemployed when companies leave, Draws workers from agriculture to urban living in cities unprepared for the population explosion
Why is the COO (country of origin) important?
B and C, It helps to establish the tariff rate for duties charged on imported products. Customers are beginning to want to know where their clothing is made.
The Asian nation whose economy depends most heavily on exporting apparel is____.
Bangladesh
Which of the following is a newly developing country?
Bangladesh
What is the capital of Germany?
Berlin
The cost of the fabric may be __________.
Between 50 to 70% of the total cost of the product.
Which three documents must the shipper always present at Customs (because there are other documents which might be required, too)?
Bill of lading, commercial invoice, packing list
How do companies create transparency of information within the technology system so that there is only one version of the truth in regards to data?
Both A and B, Web-based and real-time communication, and Software packages dedicated to product data management (PDM) specifically, PLM which includes both design and data capabilities.
Vanity Fair (VF) is an example of _____________.
Brand manager
What is the capital of Brazil and where is Brazil located?
Brasilia, South America
Which Mercosur country is known for growing cotton and is one of the world's leading denim producers?
Brazil
_______ are a part of the culture in many developing and newly developing nations, where companies and individuals often have to provide additional incentives to corrupt state officials to do what they are supposed to.
Bribes
Due to CAFTA-DR, the apparel production in most countries converted from 807 (US shipping cut pieces of garments to factories in CAFTA-DR) to what kind of factory or vendor?
CMT
Which type of factory requires very detailed specs?
CMT
Of the 9 goals of global sourcing, which one refers to the management of how much and how long it takes to make a certain volume of product, which represents the limits of what a factory is able to produce?
Capacity
The group of countries in the Western Hemisphere that has suffered the most from the end of the quota system is ________.
Caribbean Basin countries
NAICS 314 is the Textile Product Mills subsector. Which one of the following is an example of the products made in this subsector?
Carpet
The third-largest retailer, after Costco and Walmart, is which of the following?
Carrefour from France
The newest free trade agreement listed below between the United States and a group of nations is ____.
Central American - Dominican Republic Free Trade Agreement (CAFTA-DR)
A financial penalty imposed by the customer on a vendor for noncompliance with established vendor compliance rules is called a ___________.
Charge-back
Which country is considered the most stable?
Chile
Select one country that is not considered a developed economy based on GDP per capita.
China
The Trans-Pacific Partnership excludes this country but the Free trade Area of the Asia Pacific includes this country. Which country?
China
Which country is both a major producer and a major consumer with a growing domestic market, and is the #1 destination for US cotton?
China
Which country is repeatedly identified as one of those who frequently violate intellectual property laws?
China
Which of the following countries is NOT an ASEAN member?
China
Japan's Teijin was the first company to develop _______________ of polyester.
Closed-loop recycling
Redistribution of used goods from someone who does not want them to someone who does want them is ___________________.
Collaborative consumption
Which South America country specializes in high-quality fashion apparel and is recognized as a main fashion center in Latin America?
Colombia
Which trade theory suggests that trade happens when two countries can benefit from trade due to their relative costs to produce the same products?
Comparative Advantage theory
China is generally considered a country where _____________ goods are sourced, requiring ___________ labor.
Complex, highly-skilled
Which of the following phrases is NOT true about the Global Competitiveness Index (GCI)?
Considered better for a country if the index value is high
A person or firm that combines cargo from a number of shippers going to the same destination into one container for the purpose of reducing shipping rates is known as a ________.
Consolidator
In the article, "The Consumer Recession Is Hurting Macy's..." by Walter Loeb, the main topic is which of the following?
Consumer apathy
In 2014, worldwide, the combination of cybercrime and espionage was estimated to have cost world businesses and government 1 percent of global income; that is $445 billion per year. Who pays for these extra costs ultimately?
Consumers
What is the source of pressure to drive down textile and apparel product costs?
Consumers
The success and future of the fair trade movement ultimately depends on __________.
Consumers' decisions to support the movement by purchasing fair trade products
An imitation of an original that illegally carries the original trademark is called a ______, but a _____________ is an imitation of the original made by a different company and different trademark, usually using lower-cost materials and production methods and sold through legitimate retailers at a much lower price than the original.
Counterfeit, knockoff
Which statement is NOT correct about counterfeit goods and counterfeiting?
Counterfeiting is the same as making a knockoff.
What activity is regarded as a fair form of competition?
Countervailing duties
Intellectual property includes all but which of the following?
Country of origin
Which one of the following is NOT part of the purpose and activities of customs services?
Creating new regulations
A CMT factory is capable of performing all but one of the services listed below. Which one would they not offer?
Creative and technical design
What is the main challenge to meeting the goals of the Organization of American States?
Cultural values related to time, work, frugality, education, merit, community and ethics vary widely among the member nations.
Which of the professionals below will help you achieve the lowest duty rate?
Customs broker
What is it called when the computer is used as the primary means of commission of illegal activity?
Cybercrime
What is the latest emerging trend?
De-globalization
Several sourcing strategies are intended to improve both sustainability and speed-to-market goals. Which one of the following is not intended for those goals?
Decentralizing sourcing activities
When sourcing from the Caribbean Basin, what is the greatest challenge according to the author of the textbook?
Deciding which trade preference program is most appropriate for your product
Incorrect product classification may result in which of the following?
Delayed entry into the country or denial
The sourcing calendar is based on which of the following?
Delivery or floor set date
Most of the Middle East is a ___________.
Desert
Sustainability of textile-based products is primarily determined during the ____________ stage of product lifecycle.
Design and product development
What kinds of jobs are included in the global value chain that would not be included in the supply chain?
Designer, product developer, sourcing manager
Which one of the following is NOT a core competency of sourcing?
Designing product
An activity performed by a licensee is __________.
Designing, producing, and sourcing goods
As a sourcing company, there are 3 major components which may be outsourced. Which of the following is NOT one of the components which may be outsourced?
Determination of country and supplier
What is the capital of Bangladesh?
Dhaka
The design of which of the following products cannot be copyrighted in the United States but could be in Europe?
Dress design
What was the primary effect of the MFA (Multi-Fiber Arrangement) which proves that trade policies have unintended consequences?
Driving apparel production around the world.
Obligations of an individual, group, or society to use all resources efficiently and minimize waste is ___________ responsibility.
Economic
When considering the factors which impact sourcing apparel assembly decisions, which of the following is not dependent on the geographic location (instead it relates to the level of development of the country)?
Education
Which characteristic is often judged to be the most important for sourcing professionals to consider when selecting a country location for producing high quality apparel?
Education
Which country had a temporary setback with the Arab Spring but has recovered and were able to attract many US retailers by updating record-keeping ability?
Egypt
The gross domestic product (GDP) and the gross national product (GNP) are basically the same.
False
In the speech given by Christine Lagarde, Managing Director of the International Monetary Fund to students at the University of Maryland, what did she point out in the first part of her speech, "The Role of Emerging Markets"?
Emerging and developing markets matter to us because they make so many of the things we use every day.
Recent changes in apparel manufacturing and retail in China include all but one of the following:
Emphasis on low-end, inexpensive apparel
According to NAICS, wholesalers by definition do not sell to which of the following?
End consumers
There are many ways to avoid paying the correct duty which are illegal. Which of the following is not an illegal way of avoiding duties?
Engineering the garment to a lower duty rate
A government subsidy ____________.
Enhances industry or company competitiveness.
What is the name of the EU common currency established in 2001?
Euro
Which definition of 'trade' below implies and thus includes protected trade, free trade and fair trade?
Exchange of goods and services across political boundaries.
An example of an organization created to establish a transparent and independent auditing process for manufacturing facilities is:
FLA (Fair Trade Association)
NAFTA included a requirement that to qualify for free trade, yans and fabrics had to be produced in Canada, Mexico or the US. This is known as the:
Fabric-forward rule
A supply chain includes only textile and apparel related firms in the textile complex.
False
For the most part, the EU focuses on mass production and fashion basics.
False
Governments operate most of the businesses in the EU as well as trade regulations and economic incentives.
False
If a sourcing organization does not want to pay for and ship the fabric to the factory, it must contract with a CMT factory.
False
International trade in textiles and apparel is a relatively new phenomenon.
False
Most fabric mills have fabric already made, ready to be shipped to the factory.
False
What do textile mills produce?
Fibers, yarns, threads, and fabrics
Which of the following direct costs tends to be similar across countries?
Findings, trims, labeling and packaging
Members of a trade association are typically who?
Firms
When a retailer has a sourcing matrix with small suppliers, medium suppliers and suppliers capable of large volumes throughout the world, many of whom offer specialty textiles and apparel, we would call this strategy:
Flexible supply chain and flexible sourcing
The earliest members of the organization that became the EU were:_________.
France, Italy and the United Kingdom
A port or other site within a nation designated for duty-free entry of selected goods to be displayed, stored or used for manufacturing is known as a ____________.
Free trade zone
What is the term which refers to a factory capable of offering many services, from design to packaging and shipping?
Full package
What are 'seconds' and why is it important to know what happens to seconds?
Garments which are not of first quality; many customers want to control what happens to the seconds in order to protect the brand image and equity.
The trade agreement that began as advocating for free trade among nations and ended up as a confusing repository for a multitude of bilateral agreements that established quoats on textiles and apparel is known as ____________.
General Agreement on Tariffs and Trade (GATT)
In the United States, this activity is the major contributor to the emission of greenhouse gases.
Generation of electricity
Which EU country is known to be investing in Vietnam and building trade relationships with Vietnam?
Germany
Which European country is global leader in the development and export of textile and apparel production machinery?
Germany
Which country in Europe has the largest economy as well as the largest populations?
Germany
Who is Japan's competitor in the technical textiles business?
Germany
One of the world's major trade shows is held in Germany; it is the world's largest sporting goods trade show. Many designers and retailers attend this show. What is it called?
ISPO
Which of the following statements is true about illegal transshipment?
Illegal transshipment involves shipping goods to a third country to declare that the goods were made in that country before re-exporting them to the intended market.
Who is the professional person or firm that assists a business in a foreign country and acts as intermediary between the customer and the vendor?
Import agent
What is the term for a business which recently developed and assists textile and apparel firms in satisfying customer demand for goods and services from the global market?
Import and export traders (intermediary traders)
For a product with the same nominal tariffs, the importing firms in the EU need to pay a higher duty than the importing firms in the US, because _________.
In the EU, the transaction value includes freight and insurance, whereas in the US it is calculated based on product cost only.
Which statement is NOT a correct description of full container load (FCL)?
It is more expensive to ship a 20-foot container of merchandise than to ship the same merchandise as loose cargo
Which statement is NOT correct about India?
India has a very limited supply of domestic cotton production for its textile industry.
In the ASEAN community, economic activity is concentrated among 4 countries—together producing 75% of GDP. Which 4 nations are those?
Indonesia, Malaysia, Thailand and Singapore
Bridges, electricity, and docking facilities are examples of which of the following?
Infrastructure
Bridges, electricity, and docking facilities are examples of which of the following? Sourcing must evaluate this to determine if the sourcing location is suitable.
Infrastructure
Japan's textile and apparel industry has shifted focus to _______________.
Innovation and sustainability
IPR is the acronym for which of the following?
Intellectual Property Rights
What is the name of the imaginary line of longitude located 180 degrees east or west of the Prime Meridian and what does it do?
International Date Line; it marks the divide where the date changes by one day
What characteristic listed in Table 12.1 indicates the extremely low rate of technological development in the regions?
Internet users
Who are the best customers of European products?
Intra-EU people and Russia (Extra-EU)
Which Middle Eastern country is known for its use of advanced technology and production of high-quality products?
Israel
Which of the following countries has a labor cost most similar to the U.S.?
Israel
What makes the apparel industry easy for developing countries to start?
It has low barriers to entry.
What is a 'letter of credit" (LOC)?
It is a customer's guarantee to pay vendor if delivery date is met
Why is PPP (Purchasing Power Parity) important?
It is a measure that allows comparisons of well-being among populations in different countries.
What is one reason why trade is important?
It is essential to economic growth.
What is a 'first sample'?
It is made for approval of the design and fit of the garment.
What does "customs compliant" mean and why is it important?
It means that the merchandise is in accordance with customs rules and regulations; it's important so that the merchandise can be cleared in a timely manner.
Why is it easier to begin producing apparel than to produce textiles?
It requires relatively less capital investment; it is labor-intensive.
In Table 7.1, in the developed nations, who ranks the lowest for Ease of Doing Business?
Italy
In which country in the EU is it the most difficult to conduct business?
Italy
Which countries are the biggest textile and apparel producers, also the 5 most populated countries?
Italy, France, UK, Germany, and Spain
What is the major challenge in Africa to alleviating poverty?
Its underdeveloped infrastructure
As this Asian country developed, it saw a rapid increase in apparel imports and now focuses on technically advanced textiles.
Japan
Which country is 'in the eye of the hurricane' and for whom around 20% of the domestic GDP relies on garment exports?
Jordan
According to the McKinsey&Company report on the East Africa opportunity, which two nations are poised to grow in textile and apparel exports?
Kenya and Ethiopia
Which country is heavily invested in Central America by owning apparel factories?
Korea
Which of the following terms of costing includes the costs of the goods, insurance, freight, and import duty in the destination country?
LDP
Select one strategy that describes lean manufacturing.
Large orders to achieve economy of scale.
Why is it not appropriate to take the unemployment data for European nations at face value?
Large portions of populations are underemployed.
A philosophy of production that emphasizes efficiency and economy of scale is known as which of the following?
Lean manufacturing
When a retailer wants to concentrate on selling garments while transferring the rest of the supply chain activities onto its suppliers, it is called ____________.
Lean retailing strategy
How can intellectual property rights be transferred from the owner to another legal user?
Licensing
Which statement about licensing is correct?
Licensing is a means of legally extending the use of a brand without actually having to produce the new product.
The science of moving products through the manufacturing and distribution system to their final destinations in a timely manner is known as ________.
Logistics
The science of moving products through the supply chain to their final destination in an efficient and timely manner is known as:
Logistics
Transportation and distribution are all part of _____________.
Logistics
Step 6 in the sourcing process includes which of the following?
Logistics and importing processes
What do consumers seem to be driven by today?
Lowest price
Which company is today aggressively defending its patents in order to deflect competition in the athletic wear market?
Lululemon
Using GDP per capita as a measure, the wealthiest country in Europe is ___________.
Luxembourg
What is the name of the largest trade show in the US?
MAGIC
The source of quota regulations for textiles and apparel was the ___.
MFA
What is the term used for a process in which a vendor's expected performance is compared with actual performance?
Manufacturing control
Argentina, Brazil, Paraguay, Uruguay and Venezuela formed a trading bloc known as the Common Market of the South. What is the more usual term referring to this trading bloc which accounts for 70% of South America's total economy?
Mercosur
The degree of conformity with generally accepted or prescribed standards of goodness or rightness in conduct is ____.
Morals
Sourcing managers face many risks every day. One of the most interesting is that U.S. consumption levels of clothing are dropping. What does this mean to an apparel company?
More competition if people are buying less
Which country imports 7 times more textiles than it exported, and exported 9 times more apparel than it imported, and has a traditional leather industry?
Morocco
Which textile and apparel countries are located in North Africa?
Morocco, Tunisia, Egypt
Which statement is NOT true about the global competitiveness of American countries (refer to Table 10.2)?
Most countries in the Americas are ranked in the top 50 countries in terms of productivity
What statement is NOT correct about NAFTA?
NAFTA's major focus was the political and economic unity of its member countries.
What type of product is the primary export of these two regions?
Natural resources
Which country has the most population?
Nigeria
Which company today was among the first apparel companies to disclose a complete list of factories around the world that product apparel, footwear and accessories under its brands, is considered as having a good standard of social responsibility yet is still remembered by consumers as a business that could improve its social responsibility practices? It is proof that consumers long remember the mistakes of companies.
Nike
According to the CBP's tips for new importers, does the CBP require a license to import into the U.S.?
No
Is it true that most apparel jobs left the United States and went overseas?
No, most apparel jobs are not in production and remain in the United States.
Which of the following statements is true about the EU currency and its acceptance in the EU?
No, not all nations accept the EU currency.
Which group of countries is known for importing textiles and exporting apparel?
North Africa area
Apparel is usually measured in which units of measure?
Number of units and monetary value
A private brand retailer typically performs all but one of the supply chain functions listed below. Which one do they not do?
Owns apparel manufacturing facilities and produces its own lines
Which term refers to the process and software for managing a product's life cycle from inception, design, development of related materials, manufacturing, delivery, distribution, marketing, sale and in some cases, services and disposal?
PLM
There is another type of factory in-between CMT and full-package; what is it called and how is it different from the two ends of the spectrum?
Package: everything but product development services like design, technical design and specs
What is the final step in any sourcing process?
Performance evaluation
From which two countries do most Andean exports to the US come?
Peru and Colombia
What happens when a country has a negative trade balance?
Trade deficit
What trade show is held twice a year and is considered the leading textile trade show?
Premiere Vision
Nontariff trade barriers include which of the following?
Price support programs
What is the imaginary line of longitude that runs through Greenwich, England from the North Pole to the South Pole?
Prime Meridian
After receiving the quotes and deciding which bid to accept, the customer requests a ___________ from the selected vendor that includes all information for the sale.
Pro forma invoice
What does PLM mean?
Product life cycle management
Garments made at the factory where the apparel line will be mass produced, to check for quality and potential production issues, usually made in all ordered sizes is which of the following?
Production sample
What is it called when a special area within an exporting country grants a product manufactured in the zone duty-free access to the US market? Which countries rely heavily on these special areas?
QIZ, Jordan and Egypt
Which sourcing factor is determined by an exporting country's economic development level?
Quality of transportation and means of communication
When pockets of domestic apparel production begin reemerging in a country, such as the US, what is the popular term to describe it?
Re-shoring production
Official objectives, laws and actions designed to influence the flow of exports and imports of goods and services is known as which of the following?
Trade policy
Which one of the following sourcing methods adds to cost but may be necessary if the sourcing organization lacks knowledge of a country?
Sourcing agent or intermediary
What is "outsourcing"?
Sourcing outside of the company
Which of the following is the most developed country in Africa?
South Africa
Which of the following is NOT used as a trademark?
Spokesperson
Which sourcing theory states that sourcing managers make their sourcing decisions based on market environment?
Strategic choice theory
Which statement is NOT a correct description of sustainability?
Sustainability involves only corporate responsibility to promote cooperation and equality among people
A place where employees work long hours for substandard pay in unhealthy and unsafe conditions is known as:
Sweatshops.
Based on Table 9.2, the most productive country in Europe is _________.
Switzerland
Which FTAs are currently being negotiated, yet to be ratified?
TPP and T-TIP
What are tariffs?
Taxes on imports
Taiwan, as a developed country, is also focusing on which sector of textiles?
Technical textiles
What part of the US textile complex has been advocating for protected trade the longest?
Textile manufacturers
In terms of exports, which of the following is expected to remain the primary driver of Korean textile & apparel sector exports?
Textiles
U.S. apparel manufacturers began to rely primarily on sourcing garment assembly overseas in what decade?
The 1990s
Which statement is true about the European Union (EU)?
The EU is the largest economy in the world.
What is the name of the suite of assessment tools that standardizes the measurement of the environmental and social impacts of apparel and footwear across the product lifecycle and throughout the global value chain?
The Higg Index
Which statement about retailers in the US is true?
The US apparel retail market is becoming more and more competitive.
Among all the countries in the Western Hemisphere, _____ has the highest GDP per capita, _______ has the largest population, and __________ has the lowest life expectancy.
The United States, the United States, Haiti
Which of the following is an indirect cost which will raise the cost of the final garment?
The cost of making and shipping samples
Where would we look to know in which countries the U.S. dollar can buy more?
The currency exchange rate
Which one of the following is NOT one of the major changes that occurred between 2007 and 2011 according to the Kurt Salmon Association report?
The degree of de-globalization
If more than one country is involved in manufacturing a product, how is the country of origin determined?
The location where the last substantial transformation was carried out
What is the great concern of textile and apparel manufacturers regarding the Trans-Pacific Partnership?
The lower wages and greater production efficiencies in Vietnam
Which statement about Los Angeles' apparel industry is NOT correct?
The major focus of the Los Angeles apparel industry is tailored men's wear.
Specific tariffs are calculated based on _______, and ad valorem tariffs are calculated based on ______.
The number of units of the product, the value of the product
What is "domestic trade"?
Trade within a nation.
Everything below is a risk. But which of the risks below would be the number one fear of a sourcing manager?
The shipment isn't delivered on time
What is the main area of controversy between supporters of outsourcing production to newly developing countries and the anti-sweatshop movement?
The standards used to define a sweatshop
In a brand where speed-to-market is the first priority, how should the supply chain be set up?
The supply chain must be highly integrated in terms of information and efficiency, even though it may be geographically highly disintegrated
Which one of the following statements is true about trade surplus?
The value of exported goods is greater than the value of imported goods.
Why is counterfeiting so attractive?
There's little investment in product development, no taxes and no advertising required.
Why are U.S. sporting and denim brands at a considerable cost disadvantage when imported in the EU?
They are subject to a high duty rate
Why has the use of FTAs declined in recent years?
They are too complicated and confusing.
If a company based in the U.S. wants to sell a garment in a foreign country, it must have the care labeling written in the foreign language. If it is to be sold in 27 different countries with 27 different languages, the care label must be written in 27 different languages. How did the ISO solve the issue?
They created pictograms which symbolized the standard care label instructions.
If there is not enough population to supply the apparel factories, what will happen to the wage rates?
They increase.
According to the article "Digitize or Die" from Sourcing Journal Online, what will happen to retailers who do not digitize?
They will go bankrupt
Quality control focuses on everything that happens after production begins; what is the goal?
To be free of defects
What is the objective of preproduction processes?
To ensure that all the raw materials and components are correct
What is the objective of preproduction processes? Select the best answer.
To ensure that all the raw materials and components are correct
Why is it important for sourcing organizations to be aware of fashion trends?
To ensure the sourcing matrix is capable of manufacturing the latest trends
What is the purpose of the Organization of American States (OAS)?
To establish Pan-American Union for closer economic, cultural and political relationships
What is the goal of the IMF?
To help integrate nations into the global economy
What is the #1 goal of having a well-balanced sourcing mix?
To provide flexibility to follow the trends
What is the primary goal of the European apparel business?
To retain its image as a world fashion leader and contributor of high-value design
What is the main responsibility of Sourcing during the first step of the sourcing cycle?
To share cost and quality performance for the goods sold in past seasons.
The fundamental purpose of a government's export subsidy is _______.
To support growth of a domestic industry
What is most surprising about this region, compared to other regions is the lack of __________.
Trade between nations in the region (Internal trade)
The primary responsibility of Sourcing is to execute the strategic business plan for producing merchandise and at the micro level to ensure that the specification package is executed according to the specifications for quality and delivery.
True
The primary source of pressure on corporations to assume more social and environmental responsibility is consumer activist organizations.
True
The specifications are part of the contract between the manufacturer and the sourcing company, and the basis on which manufacturer is evaluated.
True
The strongest and most important trend related to violations of IPR is the explosion in value of CBP-seized products from China and Hong Kong, showing the violation of IPR is a worldwide problem.
True
The three primary end uses for soft goods are apparel, household goods, and industrial products.
True
The volatility and uncertainty of newly developing countries make it difficult to do business in these countries.
True
Unfair treatment of workers in the apparel industry is not only a matter of morals, it might permanently damage a company's reputation and brand image.
True
When a fabric is made of yarn consisting on only one type of fiber (e.g. 100% cotton), it is easier to recover the fiber so it may be used in new materials.
True
PLM is the one source of the __________.
Truth
Which of the following countries is not considered part of the Middle East?
Tunisia
Confidence in which country has been undermined by a climate of insecurity caused by terrorist attacks and political problems against a backdrop of a drift towards authoritarianism?
Turkey
Of the three countries below, which is most active in textile and apparel?
Turkey
Which country has a small part located in Europe and the bulk located in Asia?
Turkey
Which country has been trying to become a part of the EU for years, but still hasn't succeeded and is now unlikely to due to unrest?
Turkey
The two largest consumer markets by population size in the Middle East are ____.
Turkey and Iran
In 2013, the top apparel exporters in the region were _________.
Turkey and Morocco
In 2013, the top apparel importers in the region were ____.
Turkey and UAE
Which statement is NOT true about Turkey?
Turkey is a new member of the EU.
Which countries are extra-EU?
Turkey, Russia, Norway
Which of the following countries are active in both textiles and apparel?
UAE, Saudi Arabia, Turkey
Which two countries are considered developed in the Americas?
US and Canada
Who represents the United States in trade negotiations?
USTR
From Table 9.2, which European country is the poorest (based on GDP per capita)?
Ukraine
Based on GCI, the most productive nation in the region is ______.
United Arab Emirates
The two nations in the Middle East/African region with the highest per capita GDP are ____.
United Arab Emirates and Saudi Arabia
Which nation joined the EU but with considerable resistance and just this year voted to exit the EU?
United Kingdom
Which country imports the most clothing?
United States
What is the term used to describe company that supplies services or goods to other companies who are known as 'customers'?
Vendor
What is the term used to refer to the performance standards or rules established by the customer that a vendor must follow in the process of developing, producing, and delivering the quality and quantity of the merchandise ordered?
Vendor Compliance
What is the document which helps ensure the 'right conditions' for contracting with a supplier?
Vendor compliance
What is the term for the performance standards or business rules established by the customer?
Vendor compliance
One of the current trends in global sourcing is for increasing speed-to-market by buying and owning the supply chain needed to make the product. What is this called?
Vertical integration
When companies perform functions at more than one level (e.g. design, production and distribution), what type of business are these companies?
Vertically integrated
Which of the following is an independent nonprofit corporation dedicated to the promotion and certification of lawful, humane, and ethical manufacturing throughout the world?
WRAP
The organization currently responsible for dealing with global rules of trade is ________.
WTO (World Trade Organization)
From the Bloomberg article regarding China, what is China attempting to control in order to remain competitive in the world market?
Wages for labor
The U.S. dollar, for the first time in many years, has more value (ex: on 11/22/2016, 1 U.S. dollar = .94 euro; in the past, it was almost always 1 U.S. dollar = 1.29 euros). What does this mean for sourcing?
We can buy more overseas.
When determining whether to make or buy, which of the following criteria would NOT help the company make the decision?
Who is friends with the VP?
Thirty-five percent of the commodities seized by the US CBP in 2013 were from which of the following product categories?
Wearing apparel and accessories
The country placed on a country of origin (COO) label is determined by ___________.
Where the last substantial transformation was carried out
How is COO determined?
Where the product received its las "substantial transformation"
When it is summer in the United States, what season is it in Australia?
Winter
What statement is NOT true about Vietnam's textile and apparel manufacturing trade?
With Trans-Pacific Partnership (TPP) implemented in the early 2000s, Vietnam had an advantage of duty-free access to the US apparel market.
The United Kingdom is known for what kind of high quality fabrics?
Wool and cottons
Within the economic sphere of sustainability, the first two areas to be cut when cost need to be reduced are:
Work hours and wages
Higher productivity indicates that ____________.
Workers are less educated and have lower skills
Which of the following is a specialized agency of the United Nations whose goal is to improve the living standards of people in the developing world? This agency is able to provide interest-free loans and direct contributions from developed countries.
World Bank
Because there isn't enough volume produced in China, what must be imported to support the production of apparel?
Yarns and fabrics
Do sweatshops still exist in the United States according to the U.S. Department of Labor?
Yes
Is it possible that both a specific tariff and an ad valorem tariff may be applied to the product?
Yes
Is it true that package and full-package factories prefer to order and purchase fabrics and findings because they might make a profit when acquiring the materials?
Yes, it is true.
Is the fashion industry still valuable to the United Kingdom?
Yes, there are many well-known fashion designers and it contributed 14.3 billion pounds to the economy.
Which of the following is not a method of sourcing?
building your own factory abroad
What is the driving force behind the textile and apparel industries?
consumer demand
Fully developed nations tend to focus on _________ rather than _______ of textiles and apparel.
consumption, production
When contracting with an FOB factory, the sourcing firm _____________.
is often responsible for customs clearance and paying import duties
Which one of the following is capital-intensive and requires highly skilled workers?
textile production
Which one of the following is capital-intensive and requires highly skilled workers?
textile production
When developing trade policy, which is usually highly political, it is best to ask who will benefit from the policy and who will pay for the policy.
true
