Deck 15: Exporting and Logistics: Special Issues for Business

Question 1

Three kinds of barriers to exporting facing international traders: managerial,organizational,and external.

Answer 1

True

Question 2

If a seller uses a bill of exchange with a foreign buyer,the seller assumes all risk until seller receives the actual dollars.

Answer 2

True

Question 3

Export regulations may be designed to conserve scarce goods for home consumption or to control the flow of strategic goods to actual or potential enemies.

Answer 3

True

Question 4

Maquiladora management is a name given to a total systems approach to management of the distribution process that includes such activities as physically moving raw materials,in-process inventory,and finished goods inventory from point of origin to the point of use or consumption.

Question 5

The term of sale called CIF stands for cost,insurance,and freight.

Question 6

A common term of sale for international goods is PAX (payment of account at site of export).

Question 7

Inconvertible currencies and cash-short customers can kill an international sale if the seller cannot offer long-term financing.Unless the company has large cash reserves to finance its customers,a deal may be lost.One way to solve this problem is a financing technique called forfaiting.

Question 8

With respect to tariffs,a compound duty is based solely on a stipulated amount per unit weight or some other measure of quantity.

Question 9

A physical distribution system is considered to be only the physical movement of goods themselves.

Question 10

A boycott is an absolute restriction against trade with a country,or trade of specific goods.

Question 11

The best way to determine if you need an export license to export into a country is to check the International Country Registry List maintained by the United Nations.

Question 12

Letters of credit shift the buyer's credit risk to the bank issuing the letter of credit.

Question 13

The Certificate of Origin is the most important document required for establishing legal ownership and facilitating financial transactions.

Question 14

In order to get a license to export,a company must first get an Export Control Classification Number (ECCN).

Question 15

An example of what is called customs-privileged facilities is a free trade zone.

Question 16

Because of new trade agreements that have been recently signed,only a few countries still control the movement of goods crossing their borders rigidly.

Question 17

One of the ways to determine if a company is planning to ship goods into a country illegally or divert those goods to countries that are on a national security watch list is to watch for "red flags" that would be indicators of such practices.A good "red flag" to watch would be if a freight-forwarding firm was listed as the product's final destination.

Question 18

The Export License Application and Information Network enables exporters that have authorization to submit license applications via the Internet for all commodities except supercomputers to all free-world destinations.

Question 19

The United States has specific quotas for importing cotton,tobacco,and peanuts.

Question 20

Maquiladora is the name given to an operation that allows processing,packaging,assembling,and/or repair plants to be located in Mexico (in-bond areas)where goods may be processed without import taxes as long as they are re-exported to the United States or to another foreign country.

Question 21

The Export Control Classification Number leads to a description in the _____________,which indicates the exportability status of the item.

A)Security Control List
B)United Nations Export List
C)United States Inventory of Goods and Services
D)Commerce Control List
E)Controlled Substances List

Question 22

What does the Commerce Country Chart (CCC)do?

A)It tells how much commerce a country does.
B)It helps you determine,based on the reasons for control associated with an item,if you need a license to export or re-export the item.
C)It ranks countries based on amount of commerce.
D)It tells what government agencies might have placed restrictions on goods that are to be exported.
E)It provides a complete listing of country bar codes.

Question 23

When goods are shipped overseas,ocean shipping is usually the least expensive and most frequently used for heavy bulk shipment of goods.

Question 24

According to information presented in the text,if an exporter were to conceal one item for which permission to export had not been granted in with items that had proper permissions and credentials,the exporter would be in violation of which of the following?

A)export license requirements
B)antiboycott provisions
C)duel use products
D)faulty factoring
E)deceitful distribution

Question 25

Walker James has just been offered an opportunity to re-export some materials that originated in Sicily.He wants to be honest about the opportunity and determine if there might be any potential problems with the Bureau of Export Administration before going forwards with the deal.Which of the following might be serious "red flags" that might alert Mr.James to potential difficulties?

A)the exporter is located in France
B)the exporter is having difficulty with a labor union in Sicily
C)the shipping route is abnormal for the product and its eventual destination.
D)the exporter has an outstanding export history.
E)the exporter recently made staff reductions.

Question 26

_________ regulations may be imposed to protect health,conserve foreign exchange,or serve as economic reprisals.

A)Export
B)Import
C)Demand
D)Supply
E)Maritime

Question 27

The only real benefit of a sound physical distribution system is the cost advantage that it brings to the buyers and sellers engaged in the process.

Question 28

Fifteen years ago,Apex Photographic Supply got into difficulty with the world community when it attempted to send photographic recovery processing equipment to the then outlawed South African government by shipping through Israel (which recognized the South African government).The exporter was found to be in violation of which of the following?

A)export license requirements
B)antiboycott provisions
C)duel use products
D)faulty factoring
E)deceitful promotion and communication

Question 29

Before 9/11,security in logistics referred to preventing theft or pilferage.

Question 30

According to U.S.Customs,the 24-hour rule states that all goods sent to the United States must be picked up within 24-hours of receipt to ensure that goods do not linger in receiving warehouses too long.

Question 31

Which of the following is designed to speed up the process for granting export licenses by removing a large number of items from specific export license control?

A)Import Administration Regulations
B)Commerce Agency Regulations
C)Better Business Bureau Statutes
D)Export Administration Regulations
E)Federal Customs Regulations.

Question 32

According to the exporting process,all of the following would be considered to be types of documentation for goods leaving a country EXCEPT:

A)confidentially agreement
B)commercial invoice
C)bar codes of goods
D)exchange rate agreement
E)retained earnings statement

Question 33

Which of the following is an acceptable way to determine a product's Export Control Classification Number?

A)You can look it up online.
B)You can contact a local Better Business Bureau representative.
C)You can contact the manufacturer to see if they already have an ECCN.
D)You can contact the buyer of the product and get the number from them.
E)You can request the manufacturer to see if they have product bar codes.

Question 34

Merge-in-transit is a distribution method in which goods shipped from several supply locations are consolidated into one final customer delivery point while they are in transit and then shipped as a unit to the customer.

Question 35

According to the exporting process,all of the following would be considered to be types of documentation for goods leaving a country EXCEPT:

A)confidentially agreement
B)commercial invoice
C)bar codes of goods
D)exchange rate agreement
E)a consular invoice

Question 36

The exporter is responsible for selecting the proper classification number known as the __________________ for the item to be exported.

A)Inventory Tracking Number
B)Personal Identification Number
C)Export Control Classification Number
D)Security Control Number
E)ExIm Number

Question 37

According to the exporting process,which of the following would be considered to be a type of documentation for goods leaving a country?

A)export declaration
B)confidentially agreement
C)bar codes of goods
D)exchange rate agreement
E)retained earnings statement

Question 38

According to the exporting process,all of the following would be considered to be types of documentation for goods leaving a country EXCEPT:

A)exchange rate agreement
B)retained earnings statement
C)bill of lading
D)confidentially agreement
E)bar codes of goods

Question 39

A foreign freight forwarder,as an agent for the buyer,arranges for delivery of goods,receives the goods,and then has the buyer come by and pick the goods up.

Question 40

_____________ regulations may be designed to conserve scarce goods for home consumption or to control the flow of strategic goods to actual or potential enemies.

A)Export
B)Import
C)Demand
D)Supply
E)Maritime

Question 41

When an exporter agrees to sell to a foreign buyer using the letter-of-credit format for payment,the next step after the exporter and customer agree on terms of sale is to have the buyer:

A)send payment documents to the seller.
B)request its foreign bank to open a letter of credit.
C)check the financial background of the seller.
D)place an escrow document with a local lawyer.
E)provide a statement of earnings.

Question 42

____________ are (is)presented at the port of exit,includes the names and addresses of the principles involved,the destination of the goods,a full description of the goods,and their declared value.

A)The Bill of Lading
B)Commercial Invoice
C)Export Documents
D)Insurance Policy or Certificate
E)Consular Invoice

Question 43

May Ling Chin has had poor success in collecting monies owed from clients in Hong Kong even though she understands that ins and outs of doing business with the Chinese there.In future arrangements she plans to pursue _____________ where,after offering the buyer a long-term financing deal,she will sell the account receivable to a Hong Kong bank and let them worry about collecting.She will not receive as much money as she would like but she will at least be assured of receiving a fair amount.

A)letters of credit
B)bills of exchange
C)forfaiting
D)consular invoicing
E)express financing

Question 44

In U.S.domestic trade,the typical payment procedure for established customers is _____________ where the goods are delivered and the customer is billed on an end-of-the-month basis.

A)letters of credit
B)open account
C)bills of exchange
D)closed account
E)third-party account

Question 45

In _____________,the price quoted covers costs only at the point of origin.All other charges are the buyer's concern.

A)CIF
B)C&F
C)FAS
D)FOB
E)EX

Question 46

_______________ enables exporters that have authorization to submit license applications via the Internet for all commodities except supercomputers to all free-world destinations.

A)ELAIN (Export License Application and Information Network)
B)STELA (System for Tracking Export License Applications)
C)ERIC (Electronic Request for Item Classification)
D)SNAP (Simplified Network Application Process)
E)ITIS (International Trade Information System)

Question 47

Dollar __________ have advantages for the seller because an accepted draft frequently can be discounted at a bank for immediate payment.

A)drafts
B)bills
C)date
D)parallel
E)forfaiting

Question 48

An important form of international commercial payment is ___________ (dollar drafts)where the seller assumes all risk until the actual dollars are received.

A)letters of credit
B)forfaiting
C)cash-in-advance
D)commercial invoicing
E)bills of exchange

Question 49

According to the text,the United States has specific quotas for importing all of the following EXCEPT:

A)sugar.
B)wheat.
C)peanuts.
D)toys.
E)cotton.

Question 50

With respect to terms of sale,CIF stands for:

A)California Import Freight
B)Cost,Insurance,Freight
C)Cost of Importing Freight
D)Cost,Insurance,Forwarding
E)Calculation of Insurance and Freight

Question 51

The most important document required for establishing legal ownership and facilitating financial transactions is called:

A)the Bill of Lading.
B)a Commercial Invoice.
C)Export Documents.
D)an Insurance Policy or Certificate.
E)the Consular Invoice.

Question 52

______________ an alternative to paper license submissions,enables an exporter to submit export and re-export applications,high-performance computer notices,and commodity classification requests via the Internet.

A)ELAIN (Export License Application and Information Network)
B)STELA (System for Tracking Export License Applications)
C)ERIC (Electronic Request for Item Classification)
D)SNAP (Simplified Network Application Process)
E)ITIS (International Trade Information System)

Question 53

________________ is an automated voice-response system for tracking applications.

A)ELAIN (Export License Application and Information Network)
B)STELA (System for Tracking Export License Applications)
C)ERIC (Electronic Request for Item Classification)
D)SNAP (Simplified Network Application Process)
E)ITIS (International Trade Information System)

Question 54

If a buyer and seller in an international transaction use the letter of credit format for completing the marketing transaction between the two,what is the last step in the process?

A)the seller files the letter of credit.
B)the buyer files the letter of credit.
C)the seller receives payment.
D)the goods are released to the buyer.
E)a customs broker receives the goods for processing.

Question 55

In the United States domestic trade,it is customary to ship __________ meaning that the price is established at the door of the factory.

A)CIF
B)C&F
C)FAS
D)FOB
E)EX

Question 56

Which of the following is a duty that is a stipulated amount per unit of weight or some other measure of quantity?

A)ad valorem duty
B)specific duty
C)compound duty
D)percentage duty
E)fabricated duty

Question 57

_____________ are the taxes or customs duties levied against goods imported from another country.

A)Tariffs
B)Exchange permits
C)Import licenses
D)Quotas
E)Standards

Question 58

Under the FOB Inland Carrier at Point of Shipment,the buyer is responsible for costs or charges of all of the following EXCEPT:

A)port charges.
B)forwarder's fee.
C)consular fee.
D)export packing.
E)customs duties.

Question 59

A __________ is an absolute restriction against trade with a country,or trade of specific goods.

A)standard
B)restriction
C)boycott
D)demarcation declaration
E)quota

Question 60

Reba Sinclair is going to export her fabrics to a company in Hong Kong.Though there are many arrangements that could be made to do this,Ms.Sinclair is going to use the typical arrangement used by most U.S.exporters when shipping goods abroad.Which of the following would that be?

A)letters of credit
B)open account
C)bills of exchange
D)closed account
E)third-party account

Question 61

Which of the following is a benefit of a physical distribution system?

A)cost advantages
B)piggy-back cargo service
C)cargo passenger service
D)air drop capability
E)free ocean transport

Question 62

Random Motors ships cars to Hong Kong on a constant basis.However,it is not unusual for the slower ocean freight method that the company uses to experience problems with weather,equipment breakdowns,accidents,or even labor problems.Which of the following would be the best suggestion for Random Motors to pursue to ensure that no out-of-stock conditions in Hong Kong would cause dealers and consumers concern?

A)be willing to air freight automobiles to Hong Kong
B)be willing to buy a rival's inventory if necessary
C)require that all dealers order six months in advance of need
D)maintain a 30-day inventory in Singapore and another 30-day inventory at the company's distribution center in Hong Kong
E)purchase no-fault insurance to cover losses

Question 63

Use of a combination of rail,truck,plane,and ship shipping methods is called _______________ shipping.

A)containerization
B)packaging
C)mass shipping
D)cargo boxing
E)intermodal

Question 64

Which of the following is a benefit of a physical distribution system?

A)cargo passenger service
B)air drop capability
C)piggy-back cargo service
D)more dependable delivery service
E)free ocean transport

Question 65

Another name for an in-bond company operating out of Mexico would be a(n):

A)companaros.
B)ex-patriot warehouse.
C)refuge zone.
D)Maquiladoras.
E)Norazi facility.

Question 66

Which of the following is a benefit of a physical distribution system?

A)piggy-back cargo service
B)cargo passenger service
C)air drop capability
D)optimal production capacity
E)free ocean transport

Question 67

The concept behind _______________ is the achievement of the optimum (lowest)system cost consistent with the customer service objectives of the firm.

A)reseller maintenance
B)warehousing
C)inventory control
D)FOB
E)physical distribution

Question 68

Another term for a foreign-trade zone is a:

A)free trade zone.
B)zoned warehouse.
C)restricted port facility.
D)consular area.
E)locked trade zone.

Question 69

All of the following are forms of a customs-privileged facility EXCEPT:

A)foreign trade zones.
B)free trade zones.
C)free ports.
D)in-bond arrangements.
E)all of the above are types of customs-privileged facilities.

Question 70

Apple Computer operates an in-bond facility in Nuevo Laredo,Mexico,where it processes,packages,assembles,and even repairs Apple computers.Once the tasks are completed,Apple sends the goods back to the United States without ever paying exporting or importing fees from either country.Such an arrangement (facility)is popularly called:

A)companaros.
B)an EX-IM warehouse.
C)a refuge zone.
D)Maquiladoras.
E)a Norazi facility.

Question 71

Which of the following is a benefit of a physical distribution system?

A)free ocean transport
B)piggy-back cargo service
C)optimal inventory levels
D)cargo passenger service
E)air drop capability

Question 72

Every international transaction requires _______________,that is,a bill or statement for the goods sold.

A)the Bill of Lading
B)a Commercial Invoice
C)Export Documents
D)an Insurance Certificate
E)the Consular Invoice

Question 73

A total systems approach to management of the distribution process that includes such activities as physically moving raw material,in-process inventory,and finished goods inventory is called:

A)distributing.
B)reseller management.
C)intermediary control.
D)physical management.
E)logistics management.

Question 74

The concept of _____________ takes into account the interdependence of the costs of each activity.

A)reselling
B)intermediary control
C)purchasing
D)physical distribution
E)channel design

Question 75

The _______________ arranges for the shipment of goods as the agent for an exporter.

A)rack jobber
B)drop shipper
C)foreign freight forwarder
D)import contractor
E)export management service

Question 76

According to the text,physical distribution systems take into account interdependence of the costs of each activity,meaning:

A)a decision involving one activity affects the cost and efficiency of one or all other activities.
B)reliance on distribution systems to overcome international resistance to global interdependence.
C)what goes up must come down.
D)the physical distance does not equal the cost of transportation.
E)the separation of distribution systems from other internal functions creates a dynamic scoring calculation.

Question 77

The ___________ rule requires that containers shipped into the United States must have a detailed manifest to U.S.Customs 24-hours before a container is loaded on board a vessel.

A)Anti-Terrorist
B)Port Authority
C)24-Hour
D)Day-in-Advance
E)Container Content

Question 78

FedEx offers _____________ when it takes a manufacturer's product,warehouses it and keeps the inventory,provides all labor and technology,and moves it throughout the world.

A)total management service
B)total distribution service
C)total marketing service
D)total information service
E)total logistics service

Question 79

Which of the following companies truly offer door-to-door delivery around the world?

A)U.S.Post Office & Ace Delivery Service
B)Time-Warner Distribution & Wal-Mart Fast-Packaging
C)Air freight forwarders & Ocean Freight carriers
D)UPS & FedEx
E)British Airways & American Airlines

Question 80

What is the name of the system that integrates the location of plants and warehouses,transportation modes,inventory quantities,and packing?

A)distributing
B)reselling
C)intermediary control
D)physical distribution system
E)channel management