Question 1

A/An ____ can be changed or canceled at any time by the buyer without the seller's consent.

Accepted Answer

A revocable letter of credit can be altered or canceled by the buyer without the seller's agreement, unlike an irrevocable letter of credit where the seller's consent is required for any amendments or cancellations. The other options are not relevant to the question.

Question 2

With a ____,both parties agree that payment occurs as long as exchange rates do not fluctuate outside an agreed-upon range or band.

Accepted Answer

The option described is a currency adjustment clause, which is an agreement between two parties that payment occurs as long as exchange rates do not fluctuate outside an agreed-upon range or band. This clause is useful in protecting both parties from currency risk, as it ensures that payment remains stable within a certain range.

Question 3

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

Accepted Answer

Corporate sales, general, and administrative expenses are not directly related to worldwide sourcing, but rather are overhead costs that are incurred regardless of the origin of the sourced products. The other options listed - packaging, transportation, customs duty, and insurance premiums - are all elements of total cost that are directly related to worldwide sourcing.

Question 4

____ 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.

Accepted Answer

Buy-back occurs when a firm agrees to build a plant or provide equipment/technology in another country and accepts some of the plant's output as payment. This arrangement is often used in international trade to facilitate deals where direct monetary exchange may be difficult or when fostering long-term relationships and technology transfer.

Question 5

Which of the following is not an example of resources that affect global sourcing success?

Accepted Answer

A large corporate headquarters building is not directly related to global sourcing success as it is more related to the physical infrastructure of the company rather than the resources specifically related to global sourcing. The other options listed are all examples of resources that are critical to global sourcing success.

Question 6

A/An ____ can only be changed or canceled upon agreement of all parties.

Accepted Answer

An irrevocable letter of credit cannot be changed or canceled without the agreement of all parties involved. The other options may have varying degrees of flexibility or conditions, but they do not have the same level of permanence as an irrevocable letter of credit.

Question 7

____ occurs when a selling company agrees to accept goods from the buying country as partial payment,even if it does not want them,and then sells,at a discount,the credits for these goods to a third-party trader,which sells or markets the goods.

Accepted Answer

Switch trading occurs when a company accepts goods from a buying country as partial payment and then sells the credits for these goods to a third-party trader, who then sells or markets the goods.

Question 8

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

Accepted Answer

Paying in U.S. dollars is not a way for the finance department to support international currency requirements, as this only applies to transactions in which the U.S. dollar is the currency used by both parties (e.g., U.S. companies buying goods from other U.S. companies). The other options listed are ways in which the finance department can support international currency requirements.

Question 9

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

Accepted Answer

Direct labor in production is not a cost element of worldwide sourcing. Payment terms, customs brokers fees, additional fees or commissions, and inventory carrying costs are all elements of total cost for worldwide sourcing.

Question 10

All of the following are examples of the reliable and timely information required for successful global sourcing except ____.

Accepted Answer

Truck traffic patterns around the supplier's facility are not necessary for successful global sourcing. The other options are all important sources of information for successful global sourcing.

Question 11

Which of the following is not one of the factors that drive global sourcing performance?

Accepted Answer

The ability to speak multiple foreign languages may be helpful in some aspects of global sourcing, but it is not a factor that directly drives global sourcing performance. The other options listed (centrally coordinated decision making, site-based control, sourcing and contracting systems, and international purchasing office support) are all important factors that can impact the effectiveness of global sourcing initiatives.

Question 12

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

Accepted Answer

New product advertising is not a direct cost associated with worldwide sourcing, while the other options listed are.

Question 13

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.

Accepted Answer

A letter of credit is a document issued by a purchaser's bank in conjunction with an affiliate bank in the seller's country, assuring the seller that the funds are available in the bank. It serves as a guarantee for payment to be made to the seller once the terms of the agreement have been fulfilled.

Question 14

____ agreements require the seller to purchase some agreed-upon percentage of goods from a country over a specified period but allow a company to fulfill its countertrade requirement with any company or industry in the country.

Accepted Answer

Offset agreements allow a company to meet its countertrade obligations by making purchases from any firm within the country, not just from the firm or industry directly involved in the initial transaction. This flexibility is often used in international defense contracts and large-scale infrastructure projects.

Question 15

All of the following are common measures used to manage currency fluctuation in international purchasing except ____.

Accepted Answer

The answer of All of the following are common measures...

Question 16

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

Accepted Answer

The purpose of buying currency contracts for a net gain is to speculate on currency fluctuations and earn a profit, not to hedge against potential losses.

Quiz 10: Worldwide Sourcing

A/An ____ can be changed or canceled at any time by the buyer without the seller's consent.

With a ____,both parties agree that payment occurs as long as exchange rates do not fluctuate outside an agreed-upon range or band.

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

____ 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.

Which of the following is not an example of resources that affect global sourcing success?

A/An ____ can only be changed or canceled upon agreement of all parties.

____ occurs when a selling company agrees to accept goods from the buying country as partial payment,even if it does not want them,and then sells,at a discount,the credits for these goods to a third-party trader,which sells or markets the goods.

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

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

All of the following are examples of the reliable and timely information required for successful global sourcing except ____.

Which of the following is not one of the factors that drive global sourcing performance?

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

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.

____ agreements require the seller to purchase some agreed-upon percentage of goods from a country over a specified period but allow a company to fulfill its countertrade requirement with any company or industry in the country.

All of the following are common measures used to manage currency fluctuation in international purchasing except ____.

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