Question 1

Supply chains in developing countries are often characterized as having large numbers of intermediaries supplying an even larger number of small retailers.

Accepted Answer

Supply chains in developing countries typically involve numerous intermediaries due to fragmented markets and infrastructure challenges, leading to a large network of small retailers.

Question 2

In an exporting strategy, the domestic firm has very little control over the pricing, promotion, or distribution of its product in the foreign market.

Accepted Answer

In an exporting strategy, the domestic firm often relies on foreign intermediaries or partners, which limits its control over pricing, promotion, and distribution in the foreign market.

Question 3

Licensing is similar to exporting in that it does not require capital outlays, thereby reducing risk and increasing flexibility.

Accepted Answer

Licensing, like exporting, allows a company to enter foreign markets without significant capital investment, reducing financial risk and offering flexibility in market entry strategies.

Question 4

Licensing is not a good strategy if the foreign market has high tariff barriers or strict import quotas.

Accepted Answer

The answer of Licensing is not a good strategy if...

Question 5

Because licensing agreements include termination or cancellation provisions, it is always very easy to end a licensing agreement.

Accepted Answer

Termination or cancellation provisions may exist, but they often come with specific conditions and requirements that must be met, making it not always easy to end a licensing agreement.

Question 6

If wholly owned subsidiaries are prohibited by foreign governments, licensing may be the only method of market entry if management wishes to exercise a large amount of control over its products in the foreign market.

Accepted Answer

Licensing typically involves less control over the product compared to wholly owned subsidiaries. Joint ventures or strategic alliances might be alternatives that allow for more control than licensing.

Question 7

While firms may or may not be involved in some form of foreign market entry strategy, most are almost always involved in some aspect of importing.

Accepted Answer

Most firms engage in importing to access raw materials, components, or products that are not available or are more cost-effective from foreign markets, even if they do not actively pursue other foreign market entry strategies.

Question 8

Offshoring and nearshoring are similar concepts, but their primary difference lies in how close to the domestic country the suppliers or vendors are located.

Accepted Answer

Offshoring involves relocating business processes to a distant country, while nearshoring involves moving them to a nearby country, making proximity the primary difference.

Question 9

International versus domestic documentation is about the same in terms of complexity because each country or world region has similar specifications, regulations and requirements.

Accepted Answer

International documentation is generally more complex due to varying specifications, regulations, and requirements across different countries and regions.

Question 10

Free on board (F.O.B.) determines who is responsible for the various stages of delivery of the product, who bears what risks, and who pays for the various elements of transportation.

Accepted Answer

F.O.B. terms specify the point at which the seller transfers ownership and risk to the buyer, determining who is responsible for shipping costs and liabilities during transit.

Question 11

Products remaining in a free trade zone (also called a foreign trade zone) are not subject to duties or taxes until they are reshipped out of the zone into the country of destination. However, products in the FTZ cannot be processed, assembled, sorted or repackaged before reshipment.

Accepted Answer

Products in a free trade zone can be processed, assembled, sorted, or repackaged before being reshipped, allowing businesses to add value without incurring duties or taxes until the goods enter the domestic market.

Question 12

While there are potentially many benefits in using a FTZ, most FTZs in the United States are underutilized.

Accepted Answer

Many Foreign Trade Zones (FTZs) in the United States are underutilized due to factors such as lack of awareness, complexity in compliance, and limited resources for businesses to fully leverage the benefits.

Question 13

In China, most supply chain activities are administered and/or controlled by the government.

Accepted Answer

In China, the government plays a significant role in regulating and overseeing supply chain activities, including production, distribution, and logistics.

Question 14

Prior to the formation of the European Union (EU), the majority of transportation was local, within a 75 km radius. Since the formation of the EU, movements have tended to be more long-distance.

Accepted Answer

The formation of the EU facilitated the removal of trade barriers and the creation of a single market, encouraging longer-distance transportation across member states.

Question 15

Radio frequency identification (RFID) technology can be very useful in tracking and tracing products that have long shelf lives, but RFID is of very limited use for products such as food and flowers that have limited shelf lives.

Accepted Answer

RFID technology is useful for tracking and tracing products with both long and short shelf lives, including perishable items like food and flowers, as it provides real-time data on location and status.

Question 16

As the speed of technology advancement accelerates, it becomes more likely that additional products will undergo "technological obsolescence."

Accepted Answer

As technology advances rapidly, older products are often replaced by newer, more efficient versions, leading to technological obsolescence.

Question 17

International transportation can only take place using air or water transport. It is not feasible to utilize truck or rail transport for international shipments.

Accepted Answer

International transportation can also occur via trucks and rail, especially between countries with shared borders, such as in Europe or between the US, Canada, and Mexico.

Question 18

There are no United States container ports in the "top 10" largest container ports in the world (as measured by annual throughput in TEUs).

Accepted Answer

As of the latest data, the largest container ports in the world by TEU throughput are primarily located in Asia, with ports like Shanghai, Singapore, and Ningbo-Zhoushan leading the list. No U.S. ports rank in the top 10.

Question 19

"The most valuable commodity to customers is time, rather than money" would be an example of a social-cultural trend that impacts supply chain management.

Accepted Answer

This statement reflects a shift in consumer values and priorities, which is a social-cultural trend that can influence supply chain strategies to prioritize speed and convenience.

Question 20

Currency exchange rates would be an example of a micro category of the political and legal uncontrollable environment.

Accepted Answer

Currency exchange rates are considered a macroeconomic factor, as they are influenced by broader economic policies and global market conditions, rather than specific political or legal micro-level factors.

Quiz 12: Global Supply Chain Management