Exam 10: Worldwide Sourcing

If the purpose of buying currency contracts is to realize a net gain, then the purchaser is _____ and not _____.

Options may be used to lock in favorable rates during negotiations or anytime a purchaser is anticipating the purchase of an item from a specific country.

A/An _____ is issued by the purchaser's bank in conjunction with an affiliate bank in the seller's country which assures the seller that the funds are in the bank.

According to the CISG, a/an _____ is one of the countries that have ratified the treaty.

_____ occurs when a firm physically builds a plant in another country or provides a service, equipment, or technology to support the plant; the firm then agrees to take a portion of the plant's output as payment.

Whether the purchase transaction is with a domestic or offshore producer, there are certain common costs.

All of the following are elements of total cost for worldwide sourcing except _____.

Purchasing should consider only suppliers that capable of meeting rigid quality and delivery standards, although far too often price differentials become the primary criterion behind an offshore sourcing decision.

A FTZ _____ is approved for a specific use or a specific company.

The use of a full-service trading company may actually result in a lower total cost for international purchases compared with performing each activity individually.

In supply management, the cost/price benefits associated with sourcing in developing countries are an insignificant motivation for remaining competitive in an increasingly global environment.

Purchasing's role in countertrade is not as visible as marketing's role.

Which of the following is not an example of cost differentials that arise between countries?

The _____ was passed by Congress in 1977 to prevent companies from making questionable or illegal payments to foreign government officials, politicians, and political parties.

Always assume that an offshore company can automatically satisfy a buyer's performance requirements or expectations.

The United States is still the undisputed product and process technology leader in the world.

All of the following are examples of how a finance department can support international currency requirements except _____.

_____ occurs when a selling company agrees to accept goods from the buying country as partial payment.

The largest differences in communication styles across countries are message speed and level of content.

_____ mean(s) that no duties or quota charges will be placed on goods that are reexported from the FTZ.