Chapter 14

What are some reasons supply professionals may choose to source globally? (multiple answers) A) US currency strength B) advances in technology C) quality control concerns D) increased costs

A, B, C

Global suppliers may be able to offer more consistent quality due to (multiple answers) A) newer equipment B) a focus on zero-defects C) older, lower cost equipment D) access to innovation

A, B, D

Global trade management software assist organizations with (multiple answers) A) compliance reporting B) risk management C) pricing terms D) material qualifications

A, B, D

Alternatives to on-site visits to evaluate suppliers is conducted through (multiple answers) A) consultants B) international supplier ratings C) local purchasing organizations D) customer service surveys

A, C

The 2010 incoterms classified rules into (multiple answers) A) any mode of transportation B) security related functions C) sea and inland waterway transportation D) terminal charges

A, C

What can affect total costs for globally sourced goods? (multiple answers) A) currency fluctuations B) technology used to manufacture C) hidden costs D) location of supplier warehouses

A, C

What issues or concerns can arise when communicating with global suppliers? (multiple answers) A) language barriers B) number of supply personnel involved C) communication network challenges D) time zone differences

A, C, D

Which of the following are potential reasons for an organization to receive lower costs from a global supplier? (multiple answers) A) Lower currency exchange rates. B) Lower shipping costs. C) Lower processing costs. D) Lower manufacturing labor.

A, C, D

True or false: 3PL providers only handle the movement of goods.

False

True or false: A Maquila can only be owned by Mexican companies.

False

True or false: Supply chains are only concerned with tangible goods.

False

What was the predecessor to the World Trade Organization (WTO)?

GATT

True or false: If a supplier visit cannot be coordinated, the purchaser should request banking references.

True

True or false: Quality is generally not higher from globally sourced suppliers.

True

True or false: Sellers may be required to purchase a specified dollar amount of goods prior to being able to sell goods or services.

True

Both the buyer and seller must agree on quality control and acceptance ____________ that will be used

procedures

Match the type of intermediary with the description: handles low-volume-value contracts and is paid a commission

sales representatives

Free carrier (FCA

seller hands over goods, cleared for export, into custody of first carrier at the named place

Match the type of intermediary with the description: located in the country organizations purchase from but owned by the global company

seller's subsidiary

What year was the ASEAN established?

1967

What year did congress pass the Foreign Corrupt Practices Act?

1977

The UN Convention on Contract for the International Sale of Goods (CISG) went into effect in

1988

In 2016 the US exported over $____________ trillion in goods and services

2

The MSCI Emerging Markets Index Fund consists of __________ countries in three regions: the Americas, Europe/Middle East/Africa, and Asia.

24

Global purchasing offices give large organizations the ability to A) geographically divide supply responsibility. B) control all global supply from one location. C) purchase all supplies from one geographical region.

A

Scheduled duties payed on the value of goods imported into a country are known as A) tariffs B) claims C) warranties D) legal costs

A

The TIB bond is typically A) twice the estimated duty. B) five times the estimated duty. C) not required. D) ten times the estimated duty.

A

The coordination of all logistics functions throughout a supply chain is known as A) integrated logistics B) international logistics C) combined logistics D) outsourced logistics

A

What is used to prevent the title to goods passing before payment is made? A) bill of exchange B) warranties C) commercial letter of credit D) tariffs

A

When a seller agrees to purchase a specified value of goods from the purchasing country, this is known as? A) offset agreements B) supplier agreements C) purchase agreements D) product agreements

A

What are TWO key evaluation sources for suppliers? A) Experiences from supply personnel who have used the supplier before. B) Supplier visits to personally evaluate procedures. C) Bank statements that fully display the supplier's financial status. D) Internet searches that provide detailed reviews.

A, B

The FCPA prohibits payments (multiple answers) A) a large commissions B) to individuals who do not provide a service or good C) made in cash D) for services or goods received

A, B, C

The functions that can be performed within an FTZ are manufacturing, storage, exhibition/display, (multiple answers) A) manipulation B) refunding C) transshipment D) subcontracting

A, B, C

How can purchasers ensure compliance by suppliers to all government or social standards? A) customer service surveys B) quality checks C) this is not required D) audits

D

Organizations can learn local customs and culture prior to selling products by A) hosting purchasing conferences. B) building a local warehouse and employing local employees. C) pressuring domestic rules on international suppliers. D) purchasing goods or services.

D

Products that cross borders several times prior to final assembly are known as A) partial finished goods. B) delivery delayed goods. C) manufactured goods. D) intermediate unfinished goods.

D

The best way to evaluate an offshore supplier is A) through internet research. B) third-party supplier rating systems. C) local surveys. D) an on-site visit.

D

Typically, the choice of law an organization chooses to apply to contracts will depend on A) the supplier country is always used. B) the laws of the US always apply to international trade. C) the purchasing country is always used. D) the countries represented in the deal.

D

Which of the following should be monitored to prevent additional lead time? A) Only using ocean going transportation to make it easier for goods to transit. B) The use of customs bonds, they may cause delays with imports. C) Credit with long-term suppliers. D) The port goods will use for both exporting and importing.

D

What arrangement places the greatest risk on the buyer?

EXW

_______________ supply chains have more than doubled in the last few years

global

Supply professionals can guard against currency fluctuations through ______________

hedging

Match the type of intermediary with the description: a fee based agent to assist in global trade

import broker

Match the type of intermediary with the description: purchases goods in their name for resale to organizations

import merchant

_______________ are a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts.

incoterms

If a purchaser does not wish to purchase directly from an international supplier, they can make purchases through a(n) _______________

intermediary

Bulky or high-weight supply use marine transport and require _________- range schedules

long

Many countries when conducting business are _________ formal than the US

more

A certificate of __________ certifies materials or labor and is used to obtain preferential tariff rates.

origin

In 1993, the EU agreed to freedom of the movement of goods, (multiple answers) A) services B) money C) ships D) people

A, B, D

Only _______% of footwear is manufactured in the US currently

2

What rule assigns possession to the buyer at the dock of the port of export?

FAS

International purchasing offices (IPO) are typically used when the company A) makes purchased directly from the supplier. B) does not have a presence in the region suppliers are located. D) has a large presence in the region suppliers are located.

B

What involves the direct exchange of goods without any money? A) counterpurchase B) barter C) offset arrangement D) switch trade

B

Governments can help with technological innovation through (multiple answers) A) ERP systems B) co-located science parks C) technical training centers D) low price negotiations

B, C

Sourcing from emerging markets requires more (multiple answers) A) technology B) analysis C) knowledge D) finances

B, C

During communication with counterparts from a different country, what can help ensure a more successful encounter? (multiple answers) A) avoid the use of graphics B) speak slowly and clearly C) avoid jargon D) seek cultural advice from colleagues prior to the meeting

B, C, D

Bonded warehouses are used to A) provide a manufacturing place for cheap labor. B) avoid paying duties. C) store goods until duties are paid or goods are properly released. D) provide a zone for price negotiations.

C

Commercial letters of credit will be paid by the buyer's bank A) once supplies are received. B) once supplies are shipped. C) once all agreed conditions are met. D) once supplies are ordered.

C

One way suppliers can deliver goods faster to the purchasing country is by A) ensuring that all products are shipped by ocean vessel. B) offering lower prices for goods shipped late. C) maintaining inventory in the country for immediate shipment. D) shipping in large batches.

C

Suppliers with __________ can offer superior customer service A) better marketing B) lower prices C) better technical service D) more employees

C

The number one reason to outsource globally is A) lower construction costs B) more communication choices C) better value than from domestic sources D) fewer financial choices from international sources

C

Who is responsible for making international insurance arrangements? A) seller only B) buyer only C) buyer and seller D) the incoterms

C

When dealing with a global supply chain, __________ and ___________ must be paid attention to carefully to prevent miscommunication

Communication form, language

Clear quality standards can be established through a

SOW

Match the incoterm with the correct definition: Ex Works (EXW)

Seller has goods ready for collection at his location on the date agreed upon

Delivered duty paid (DDP)

Seller pays for all transport costs and bears all risk until goods have been delivered and duties have been paid

Delivered at terminal (DAT)

Seller pays for transport to the named terminal, buyer arranges for customs clearance and pays for transport from terminal to factory

Carriage paid to (CPT)

The seller clears the good for export, delivers them to the carrier, and pays for unloading, customs, duties, and other costs

Delivered at Place (DAP)

The seller clears the goods for export and is responsible for delivering them to the specified destination

Carriage and insurance paid (CIP)

The seller clears the goods for export, delivers them to the carrier, and pays for unloading, customs, duties, insurance, and other costs

Who approves ownership of goods located in bonded warehouses?

Treasury Department

In some cases, words can be ______________ to the incoterms to distinguish responsibilities

added

A seller agrees to supply technology or equipment to construct a facility in exchange for a specified amount of production to be bought by the original seller. This is a form of a(n) __________ agreement

buyback

_______________ is when a product is sold in another country for less than the domestic market or lower than the cost to make.

dumping

Requesting a supplier to speed up production or delivery is _______________

expediting

There are ____________ principal variations of countertrade.

five

Match the type of intermediary with the description: large firm that offers a sizable number of products from one or a limited number of countries

trading company