Question 1

Lead times and delivery times can create problems also. Longer times can _______________________. The extended lead time also might push back the date at which a firm is able to introduce new products to the market.

Accepted Answer

A)  increase inventory and drive down carrying costs 
B)  increase inventory needs and drive up carrying costs 
C)  reduce inventory needs and drive up ordering costs 
D)  increase inventory needs and drive up ordering costs 
E)  expand inventory and drive up production costs

Question 2

The quantitative costs are ____________________.

Accepted Answer

A)  exchange rate uncertainties 
B)  direct costs of importation 
C)  indirect importation costs 
D)  all the above 
E)  "B" and "C" only

Question 3

__________ is when the seller exchanges products for compensatory amounts of commodities.

Accepted Answer

A)  Offsets 
B)  Indirect offsets 
C)  Coproduction 
D)  Counter-purchase 
E)  Licensed production

Question 4

When doing business in France, (a buyer) will often go through a (n) _________ whose credentials are impeccable. (The) choice of __________ is important.

Accepted Answer

A)  banker / a banker 
B)  exporter / an exporter 
C)  chief export director / a CED 
D)  intermediary contact / an intermediary 
E)  secretary of exports / secretary

Question 5

ccording to the ________________________, export controls and restrictions may be imposed for a range of specific purposes including national security; protection of life, health, and the environment; and the preservation of national treasures.

Accepted Answer

A)  2001 Fair Trade Act of the European Union 
B)  Trade Protection Act of the European Communities 
C)  1992 Import and Export Protection Act 
D)  1991 Trade Policy Review of the European Communities 
E)  1998 Fair Trade and Tariffs Act of the EU

Question 6

Global sourcing is extremely complicated from a ___________________ viewpoint. The total cost of sourcing is perhaps the most important variable.

Accepted Answer

A)  quantitative 
B)  qualitative 
C)  financial 
D)  "B" and "C" 
E)  "A" and "B"

Question 7

The general uncertainty associated with the ______________ makes offshore sourcing a risky proposition.

Accepted Answer

A)  government regulations 
B)  business cycle 
C)  exchange rate 
D)  tariffs 
E)  taxes

Question 8

Global sourcing is the trend of the future. Supply management is becoming very important to the survival of both American and offshore firms. In certain industries, using foreign suppliers can reduce total costs. Global sourcing is by no way expanded to completely replace domestic sources; however, it is a way to meet a competitor's challenge and achieve better value for goods all over the world.

Accepted Answer

A) True 
 B)False

Question 9

The FTC Act of 1934 created ___________ to encourage exports from foreign countries. The act allowed for the storage of goods within the U.S. boundaries without payment until the goods passed to the buying company.

Accepted Answer

A)  special trade zones 
B)  tax-free zones 
C)  transit zones 
D)  foreign trade zones 
E)  free tariff zones

Question 10

The associated qualitative risk profiles of _____________________ in some foreign countries must be evaluated.

Accepted Answer

A)  the impact of national interest 
B)  the ethical consequences of "sweat shop" labor 
C)  hazardous working conditions 
D)  all the above 
E)  "B" and "C" only

Question 11

The buying firm must spend the necessary time to correctly specify and articulate quality expectations. Then evaluation makes sure that the sample is from a legitimate production run. Prototypes/lab samples should not be analyzed.

Accepted Answer

A) True 
 B)False

Question 12

The costs of global sourcing include some of the same costs found in domestic sourcing; there are also costs that are different. These costs are grouped into the following categories: _________________.

Accepted Answer

A)  administrative 
B)  foreign 
C)  common 
D)  all of the above 
E)  "A" and "B" only

Question 13

_________ is the non monetary exchange of goods-for-goods.

Accepted Answer

A)  Barter 
B)  Offsets 
C)  Indirect offsets 
D)  Coproduction 
E)  Licensed production

Question 14

Some of the more popular forms of counter trade are as follows with one exception. Which one is the exception?

Accepted Answer

A)  Offsets 
B)  Indirect offsets 
C)  Coproduction 
D)  Production transfer 
E)  Licensed production

Question 15

The distance between the buying and selling firm is significant in terms of time zones and physical location. Internet capabilities usually provide a partial solution.

Accepted Answer

A) True 
 B)False

Question 16

_________ are commercial compensation practices required as a condition of purchase of goods and services.

Accepted Answer

A)  Offsets 
B)  Indirect offsets 
C)  Coproduction 
D)  Sub-contractor production 
E)  Licensed production

Question 17

The direct and indirect costs (discussed in the textbook) tend to add unexpected costs to purchased items. However, the significant benefits associated with offshore sourcing enable the buying firm to ______________ domestic suppliers.

Accepted Answer

A)  gain leverage over 
B)  compete effectively with 
C)  reduce costs as compared to 
D)  negotiate more effectively with 
E)  reduce the number of

Question 18

___________ is the exchange of goods for goods in full or partial payment of a sales transaction. Progressive companies must participate in ____________ or risk losing market share.

Accepted Answer

A)  Exporting / exporting 
B)  Exchange trading / exchange trading 
C)  Market trading / market trading 
D)  Import trading / importing 
E)  Counter trade / counter trade

Question 19

When it comes to negotiations Americans can assume that the English and American businesses operate in the same manner.

Accepted Answer

A) True 
 B)False

Question 20

Since most offshore deals require the use of a ___________ the buying firm loses the use of funds when the ________ is established.

Accepted Answer

A)  "secured credit account" / account 
B)  "letter of credit" / letter 
C)  "wire transfer" / transfer 
D)  "letter of recommendation" / letter 
E)  "credit card" / card

Exam 10: Global Sourcing

Lead times and delivery times can create problems also. Longer times can _______________________. The extended lead time also might push back the date at which a firm is able to introduce new products to the market.

The quantitative costs are ____________________.

__________ is when the seller exchanges products for compensatory amounts of commodities.

When doing business in France, (a buyer) will often go through a (n) _ whose credentials are impeccable. (The) choice of __ is important.

ccording to the ________________________, export controls and restrictions may be imposed for a range of specific purposes including national security; protection of life, health, and the environment; and the preservation of national treasures.

Global sourcing is extremely complicated from a ___________________ viewpoint. The total cost of sourcing is perhaps the most important variable.

The general uncertainty associated with the ______________ makes offshore sourcing a risky proposition.

The FTC Act of 1934 created ___________ to encourage exports from foreign countries. The act allowed for the storage of goods within the U.S. boundaries without payment until the goods passed to the buying company.

The associated qualitative risk profiles of _____________________ in some foreign countries must be evaluated.

The buying firm must spend the necessary time to correctly specify and articulate quality expectations. Then evaluation makes sure that the sample is from a legitimate production run. Prototypes/lab samples should not be analyzed.

The costs of global sourcing include some of the same costs found in domestic sourcing; there are also costs that are different. These costs are grouped into the following categories: _________________.

_________ is the non monetary exchange of goods-for-goods.

Some of the more popular forms of counter trade are as follows with one exception. Which one is the exception?

The distance between the buying and selling firm is significant in terms of time zones and physical location. Internet capabilities usually provide a partial solution.

_________ are commercial compensation practices required as a condition of purchase of goods and services.

The direct and indirect costs (discussed in the textbook) tend to add unexpected costs to purchased items. However, the significant benefits associated with offshore sourcing enable the buying firm to ______________ domestic suppliers.

_ is the exchange of goods for goods in full or partial payment of a sales transaction. Progressive companies must participate in __ or risk losing market share.

When it comes to negotiations Americans can assume that the English and American businesses operate in the same manner.

Since most offshore deals require the use of a ___ the buying firm loses the use of funds when the is established.