Deck 14: Global Supply Management

Question 1

When sourcing offshore:

A)the buyer should learn about the culture,customs,norms,taboos,and history of the supplier's country.
B)differing cultural and social norms will have little impact since most businesspeople are accustomed to working with North Americans.
C)the need for personal space is generally the same in most regions of the world.
D)the global availability and use of email,fax,and phone has largely eliminated communication barriers.
E)the buyer should immediately establish an informal first-name basis with the supplier's representatives.

Answer 1

A

Question 2

In international buying,the entity that makes a contract with the buyer and then buys the product in its name from the foreign supplier,takes title,delivers to the place agreed on with the buyer,and then bills the buyer for the agreed-on price,is a(n):

A)import merchant.
B)import broker.
C)import agent.
D)sales agent.
E)trading company.

Answer 2

A

Question 3

When dealing with an international supplier,a knowledgeable buyer:

A)will normally attempt to negotiate a cost-plus-incentive-fee contract.
B)may decide to deal in international currency options.
C)will attempt to price in euros.
D)will normally price in the currency of the seller's country.
E)will always state the price in U.S.dollars.

Answer 3

B

Question 4

A document which is drawn by the buyer's bank at the buyer's request,and guarantees that the bank will pay the agreed-on amount when all prescribed conditions,such as satisfactory delivery,have been completed,is called a:

A)bill of material.
B)bill of exchange.
C)letter of credit.
D)sight draft.
E)letter of exchange.

Question 5

The United Nations Convention for the International Sale of Goods (CISG):

A)replaces the UCC as the worldwide body of law governing international trade.
B)should always be the preference for a buyer from the United States.
C)always puts the United States buyer at an advantage.
D)is automatically applied if both nations have adopted the CISG and there can be no exceptions.
E)is automatically applied if both nations have adopted the CISG unless another body of law is agreed upon in the contract.

Question 6

When one condition of a countertrade agreement is that government and/or military-related exports be purchased,this is called:

A)pure barter.
B)mixed barter.
C)co-production.
D)offset arrangement.
E)buyback.

Question 7

A U.S.buyer may be discouraged from sourcing offshore if:

A)unemployment is high in the U.S.
B)the political situation in the country of interest is questionable.
C)the supplier offers lower overall costs.
D)there are few domestic sources.
E)popular opinion in the U.S.is against it.

Question 8

The governing convention on shipping terms and responsibilities involved in international transportation is called:

A)FOB (Free on Board)terms.
B)EXQ (Ex Quay)terms.
C)FCA (Free Carrier named place)terms.
D)INCOTERMS (International Commercial Terms).
E)ITAPS (International Transport and Payment Specifications)terms.

Question 9

When there is a large number of common requirements across facilities or business units,and the supply base is dispersed geographically,an appropriate global sourcing structure is:

A)regional purchasing offices that manage the region's spend for every commodity.
B)a global commodity management organization.
C)a centralized international purchasing office equidistant from key suppliers.
D)a centrally managed global sourcing office located in the corporate headquarters.
E)a decentralized structure where purchasing managers are at each facility.

Question 10

Which of the following would encourage countertrade?

A)excess foreign exchange.
B)readily available credit.
C)a well-developed domestic economy.
D)a strong base of suppliers.
E)the need to develop export markets for new products.