Question 1

Why might a can of Similac sell for about $25 in the U.S. but sell for about $9 in the Netherlands?

Accepted Answer

The price difference in a can of Similac in the U.S. vs. the Netherlands may lead to the development of a gray market (i.e., parallel imports). The text offers several possible reasons for the price differential. First, it might attempt to penetrate the market. Second, it may be priced just under the other, local, competing products. Third, the Dutch government might require the company to sell at a low price. Other reasons may also exist.

Question 2

Companies relying on _________________________ middlemen relinquish their control of the marketing mix to their distributors in the target-market foreign country.

Accepted Answer

The answer of Companies relying on _________________________ middlemen relinquish their...

Question 3

Which government agency guarantees loans and makes loans to international buyers of U.S. goods?

Accepted Answer

The International Trade Administration offers export assistance to international firms, and, in particular, to small to medium-size businesses. It offers trade education, mentoring programs for exporters, and access to a market research data base. The Bureau of Export Administration advances U.S. national security, foreign policy, and economic interests by regulating exports of products and technologies that could affect those interests. The U.S. Commercial Service promotes and protects small and medium size U.S. business interests in key export markets. The Export-Import Bank is an independent government agency that aids the financing of international sales of U.S. products and services.

Question 4

Grains, gasoline, forestry products, cement, and fertilizers can be transported by

Accepted Answer

Tankers, barges, and other freighters in the sea and inland waterways account for a substantial proportion of international traffic. Waterways are used for transporting over long distances high-weight, high-volume products that have a low per pound value, such as grains, gasoline, forestry products, cement, and fertilizers. Railways remain the primary mode for intracontinental freight transportation. Cargo that has a high-weight, high-volume, and low per pound value are transported by rail, with some exceptions. Examples of rail cargo are coal, gasoline, forestry products, and grains. Higher value products, such as equipment and automobiles, may also be transported by train. Railways are a low-cost, lower-speed mode of transportation, and mobility is restricted to designated areas for freight handling. This material is found in the "International Transportation" section (11-3a).

Question 5

Webb-Pomerene associations engage in which the following tasks?

Accepted Answer

Webb-Pomerene Associations consist of companies that join resources and efforts to export internationally. The companies are granted immunity from antitrust prosecution so that they can export products manufactured in the United States to compete effectively internationally.

Question 6

According to the text, which method did Mercedes-Benz use to discourage parallel imports?

Accepted Answer

Mercedes-Benz pursued to measures to discourage parallel imports according to the text. Mercedes created very different automobiles for the U.S. and European markets. Mercedes also complicated the repair process. Individuals purchasing gray market Mercedes-Benz automobiles in the U.S. must order replacement parts from Stuttgart, Germany, making the cost of maintenance prohibitive.

Question 7

____ transport smaller shipments over shorter distances.

Accepted Answer

Truck transportation handles smaller shipments over shorter distances. Much of the local transportation-within cities, for example-is handled by trucks, which offer high flexibility at competitive rates. Often, trucks transport products carried by ship and rail to the final product destination. This material is found in the "International Transportation" section (11-3a).

Question 8

About a third of U.S. exports, in terms of dollar amounts, are transported by

Accepted Answer

About a third of U.S. exports, in terms of dollar amounts, are transported by air. This material is found in the "International Transportation" section (11-3a).

Question 9

Which agency is responsible for the International Court of Arbitration?

Accepted Answer

The International Chamber of Commerce is a business organization that represents enterprises from all sectors in every part of the world engaging in international business. The ICC makes voluntary rules that govern the conduct of business across borders and it provides important services, such as the International Court of Arbitration, the world's leading arbitral institution.

Question 10

How do government agencies affect distribution in high-income, developed countries?

Accepted Answer

In many high-income, developed countries, the government is involved in the processes of distribution and logistics as a promoter of national security interests and national regulations, as a promoter of international involvement of firms, particularly of small and medium-size businesses, and as a financing and insurance provider for higher risk international ventures.

Question 11

Which agency in the U.S. Department of Commerce offers export assistance to international firms, and, in particular, to small to medium-size businesses by offering access to a market research data base?

Accepted Answer

The International Trade Administration offers export assistance to international firms, and, in particular, to small to medium-size businesses. It offers trade education, mentoring programs for exporters, and access to a market research data base. The Bureau of Export Administration advances U.S. national security, foreign policy, and economic interests by regulating exports of products and technologies that could affect those interests. The U.S. Commercial Service promotes and protects small and medium size U.S. business interests in key export markets. The Export-Import Bank is an independent government agency that aids the financing of international sales of U.S. products and services.

Question 12

____ is used for products that are low-volume and low-weight but high-value, such as jewelry and electronics.

Accepted Answer

Air freight is used for products that are low-volume and low-weight but high-value, such as jewelry and electronics. They are also used in situations in which handling documents or materials expeditiously is essential. This material is found in the "International Transportation" section (11-3a).

Question 13

Which agency funds feasibility studies, training, business workshops, and technical assistance, aimed at infrastructure and industrial projects in developing countries?

Accepted Answer

The International Trade Administration offers export assistance to international firms, and, in particular, to small to medium-size businesses. It offers trade education, mentoring programs for exporters, and access to a market research data base. The Bureau of Export Administration advances U.S. national security, foreign policy, and economic interests by regulating exports of products and technologies that could affect those interests. The U.S. Commercial Service promotes and protects small and medium size U.S. business interests in key export markets. The U.S. Trade and Development Agency funds feasibility studies, training, business workshops, and technical assistance, aimed at infrastructure and industrial projects in developing countries.

Question 14

Which of the following is not a recommended way of fighting against parallel imports?

Accepted Answer

The text recommends several ways of discouraging parallel imports. The recommendations include charging a similar price worldwide, creating products for low markets that are not as attractive, or are not a perfect fit, with an up market, complicating the repair and servicing process for gray market goods, informing consumers about the perils of buying gray market products, and litigation. Thus, all of the above are correct.

Question 15

Which method is most likely to eliminate the existence of parallel imports?

Accepted Answer

All of the listed methods are ways of fighting against parallel imports. However, eliminating price differences is the most likely to eliminate the existence of a gray market. Gray usually exist because of price differences. If the price difference is eliminated, the need for a gray market is also eliminated.

Question 16

Which government agency operates Export Assistance Centers?

Accepted Answer

The International Trade Administration offers export assistance to international firms, and, in particular, to small to medium-size businesses. It offers trade education, mentoring programs for exporters, and access to a market research data base. The Bureau of Export Administration advances U.S. national security, foreign policy, and economic interests by regulating exports of products and technologies that could affect those interests. The U.S. Commercial Service promotes and protects small and medium size U.S. business interests in key export markets. It also operates Export Assistance Centers which offer companies a range of export facilitation services. The Export-Import Bank is an independent government agency that aids the financing of international sales of U.S. products and services.

Question 17

In the United States, international distribution and logistics involvement is shared by a number of different government agencies. With which agency are most of the other agencies affiliated?

Accepted Answer

Most agencies involved with distribution and logistics are affiliated with the Department of Commerce. The International Trade Administration and the Bureau of Export Administration are affiliated with the Department of Commerce, for example.

Question 18

Which agency of the U.S. Department of Commerce advances U.S. national security, foreign policy, and economic interests?

Accepted Answer

The International Trade Administration offers export assistance to international firms, and, in particular, to small to medium-size businesses. It offers trade education, mentoring programs for exporters, and access to a market research data base. The Bureau of Export Administration advances U.S. national security, foreign policy, and economic interests by regulating exports of products and technologies that could affect those interests. The U.S. Commercial Service promotes and protects small and medium size U.S. business interests in key export markets. The Export-Import Bank is an independent government agency that aids the financing of international sales of U.S. products and services.

Question 19

____ provide a low-cost mode of transporting liquid or semi-liquid products from the source to the target market.

Accepted Answer

Pipelines provide a low-cost mode of transporting liquid or semi-liquid products from the source to the target market in a continuous manner, where there are no interruptions (unless interruptions are voluntary), and where intermediate storage is not necessary. This material is found in the "International Transportation" section (11-3a).

Question 20

What is the appropriate order for choosing a logistics provider?

Accepted Answer

The appropriate order is to identify qualified providers, express needs and wants, evaluate bidders and select the partner, develop an integration plan, create a win-win relationship, measure and analyze results, and redefine goals and objectives.

Quiz 11: Managing International Distribution Operations and Logistics