SCMT 3643 Exam 2
What are common errors made when using INCOTERMS?
- Confusion with Domestic Terms of Trade - Confusion with older Incoterms - Improper use of correct incoterm - Not specifying the incoterms rule version
What documents are necessary to export?
- Export License - Destination Control Statement - Shipper's Export Declaration - Certificate of End-Use
Which of the following is NOT a function of packaging?
- Packaging has 3 functions 1) Protections: During transport 2) Handling; Without damage 3) Communication: Reflects the exporters firm
Which is not a reason to source globally?
- These are the reasons 1) To obtain COST SAVINGS on inputs 2) To obtain PRODUCTS that are NOT available domestically 3) To obtain materials or products of HIGHER QUALITY than what can be obtained domestically 4) To increase BARGAINING POWER with domestic suppliers 5) To develop alternate supply source RISK REDUCTION strategy 6) To obtain products using higher tech than what is available domestically 7) To shorten lead times (e.g in the case of domestic supply shortages) 8) To access an otherwise restricted market (e.g agree to purchase materials from a foreign source in exchange for a government contract)
What are the functions of the Bill of Lading?
- contract between shipper and carrier -Receipt for the goods -- responsibility of the goods is now shifted to the buyer - Certificate of title -- whoever has the BOL is the owner of the product
Which of these aspects are NOT defined by INCOTERMs?
-Aspects defined 1)Which tasks will be performed by the exporter/importer 2)Which activities will be paid by the exporter/importer 3)The exact point at which the responsibility for the goods transfers from the exporter to the importer
Which of the following is not one of the loading guideline for full container loads?
-Center of Gravity: Center of the container: Front-to-back & side-to-side -Weight: Heavier items at the bottom -Braced: With blocking or dunnage -Raised: Above the floor, on pallets or dunnage (water damage) -Ambient Humidity: use of desiccant
Which of the following does not describe bulk?
-Dry or wet bulk -Placed directly in the holds of the ship (w/o packaging of any kind) -Loading & unloading o Containerized: use cranes, one unit at a time o Bulk: With continuous method o Vacuum pumps, conveyor belts, pipes and augers -Other considerations o Wood for packaging & Dunnage o International handling pictorials
What of the following are part of every INCOTERM rule?
-Each incoterm rule has 1) a scope: the type of product for which it can be used 2) A modality: the mode of transport for which it can be used 3) a Syntax: the way it has to be stated on invoices paperwork -Aspects defined 1)Which tasks will be performed by the exporter/importer 2)Which activities will be paid by the exporter/importer 3)The exact point at which the responsibility for the goods transfers from the exporter to the importer
Which of the following is NOT a difficulty of international payments?
-Here are some characteristics o Credit info hard to find o Lack of personal contact o Collections are difficult and expensive o No easy legal recourse (court, jurisprudence) o Higher litigation costs
What of the following are characteristics of international payments?
-Here are some characteristics o Credit info hard to find o Lack of personal contact o Collections are difficult and expensive o No easy legal recourse (court, jurisprudence) o Higher litigation costs
Which of the following is not seen on an invoice?
-Pro forma Invoice: Quote (preview of the commercial invoice) provided by the exporter to the importer for the purpose of obtaining a letter of credit -Consular Invoice: A commercial invoice that is printed on stationery provided by the consulate of the country in which the good will be imported -Specialized invoice: Some countries require that invoices be printed on special forms
What is NOT a type of Bill of Lading?
-These are examples of Bills of Lading 1) Ocean Bill of Lading 2) Intermodal Bill of lading 3) Air Waybill 4) Uniform Bill of Lading
Why it is important to know where from a product is imported? What of the following is NOT a reason
...
Which of the following is the least traditional method of payment?
1) Alternative Methods: Purchasing Cards, Trade Card and Bank Guarantees. (Doesn't specifically say which is the least traditional out of those methods)
Which of the following is/are potential problem(s) in global sourcing?
1) Culture issues 2) Longer and more variable LT 3) Exchange rate fluctuations 4) Different social and labor laws/customs in foreign country 5) Political/Economic instability in Foreign country 6) Non-Receipt of goods
Which of the following are reasons to engage in international business (distribute abroad)?
1) To expand business 2) Exploit production Econ of scale 3) Profit from global economies in advertising, purchasing, transportation, ect 4) Leverage shrinking product life cycle 5) Balance Production or sales (Business life cycle/ seasonality)
What of the following are good reasons to source globally?
1) To obtain COST SAVINGS on inputs 2) To obtain PRODUCTS that are NOT available domestically 3) To obtain materials or products of HIGHER QUALITY than what can be obtained domestically 4) To increase BARGAINING POWER with domestic suppliers 5) To develop alternate supply source RISK REDUCTION strategy 6) To obtain products using higher tech than what is available domestically 7) To shorten lead times (e.g in the case of domestic supply shortages) 8) To access an otherwise restricted market (e.g agree to purchase materials from a foreign source in exchange for a government contract)
Which of the following factors are NOT important for choosing the INCOTERM to use?
1) Type of product being sold (weight, volume, perishability, value, sensitivity to temperature change) 2) Method of shipment 3) Ability and willingness of either exporter and importer to perform the tasks involved 4) Amount of trust placed by either of the parties in the other party
What is the certificate of origin?
A document that shows where the product was MADE (not shipped from)
Which of the following are sample supplier profile questions?
A) Products - Is the company making a similar product? Will it compete with the proposed purchases? B) Facilities and Equipment - Size of plant? Capacity and current utilization? Utilities available? Power supply? C) Organization and Personnel - Amount of work subcontracted? Does the firm have in-house engineers? Are there quality managers D) Ownership - Who owns and controls the company? Are the owners also the customers E) Financial ratios? - Liquidity and capitalization F) Order Administration - How are orders processed and production runs scheduled? What is the customer return rate? G) Production - How are production workers trained? Quantity and size of equipment? Maintenance of equipment? H) Quality assurance - Are quality functions distinct from production functions? How are quality tests conducted? How are vendors and transportation carriers chosen and qualified I) Shipping - Adequacy of facilities, Packaging and documentation procedures
Which of the following is not an objective of tertiary packaging?
A)Protect a. From mechanical damages (breakage, crushes, nicks and dents) 43% of claims made by shipper to insurance comp b.From water damage (sea water, rain, floods, and container sweat) 15% of claims made c. From theft and pilferage 21% of claims made
What documents designates ownership of the goods being transported?
Bill of Lading
The most important document in international transportation is...
Bill of Lading. (also could be Incoterms but not positive if that counts as a transportation document)
If a truck was crossing a boarder into a different country and was stop by authorities, what document should the driver show to prove ownership?
Bill of lading
What method of payment has the highest probability of losing a sale because of shifting risk to the customer?
Cash in Advance
Which payment method is most risky for the importer?
Cash in advance
____________ invoice is a commercial invoice that is printed on stationary provided by the consulate of the importing country.
Consular Invoice
What is a Bill of Lading?
Contract between shipper and carrier, Receipt for the goods, Certificate of title
Which of the following is NOT a characteristic of the Bill of Lading?
Contract between shipper and carrier, Receipt for the goods, Certificate of title
Why is the certificate of origin important?
Customs Authorities may require this information so that duty payable can be determined and, in some cases, establish whether the goods may be legally imported at all.
What is the role of INCOTERMS?
Define aspects of an international sale and defines responsibility for each party
What is NOT part of the Customs clearance process?
Entry -> Clearance -> Liquidated Entry -> Protest
________ is the consequence of a loss.
Exposure
Which of the following activities is/are performed by the issuing bank in letter of credit operations?
Issuing bank (Importers request, issues a LC and exporter as beneficiary)? (Unsure what the answer is.) below is from the P.P Importer -> imports bank-issuing bank -> Exporters bank-advising bank - > Exporter
Which of the following is the international transportation between the exporting country and the importing country?
Main Carriage
What method of payment has the highest risk for the seller/exporter/supplier?
Open account
What happens if a shipment arrives in customs without proper documentation?
Placed in a storage warehouse until documents come.
__________ is a quote (preview of the commercial invoice) provided by the exporter to the importer for the purpose of obtaining a letter of credit
Pro Forma
What of the following is the least frequent step of the Customs clearance process?
Protest
What is a tariff?
Rate at which an import is taxed
What is the term used to name the probability of not getting paid?
Risk: Probability of not getting paid or being paid late (commercial, country)
What is NOT a characteristic of an agency (for distribution)?
Sell directly to foreign customers, Sales agents help you find customers and to take and manage orders, Agents do not take ownership of goods work on commission
Which of the following is the packaging used for transportation?
Tertiary Packaging
What of the following are likely to explain that the same products are required to pay different tariffs?
The determinations are their class, their value and Rules of origin.
What of the following is NOT a factor for duty determination?
Three Factors 1) Type of good (Their classification) 2) The Value of the goods (Their valuation) 3) Country from which the goods originated (rules of origin)
What are the functions of packaging?
To protect a product from damage or contamination. ... To keep the product together, to contain it (i.e. so that it does not spill). ... To identify the product. ... Protection during Transport and Ease of Transport. ... Stacking and Storage
What of the following is considered a traditional method of payment in international trade?
Traditional Methods. Cash in advance, Open account, Letters of credit, Documentary collection
In the CPT (Carriage Paid To) at what point does the responsibility for the goods shift from exporter to importer?
When the exporter delivers the goods to the first carrier in the exporting country
What organization creates INCOTERMs?
the International Chamber of Commerce