Question 1

The United Kingdom's GNP is $490 billion. Their monetary unit is the Crown Royal. Typical trading partners include the United States, Germany, and other countries in the European Union (EU). Exports include machinery, transportation equipment, petroleum, and other manufactured goods.

Accepted Answer

The United Kingdom's monetary unit is the Pound Sterling, not the Crown Royal. Additionally, the GNP figure provided does not accurately reflect the current or recent size of the UK's economy, which is significantly larger.

Question 2

hina is now a _______ player in the world economy and accounts for more than 6 percent of world trade. This is remarkable for a developing economy. There has been strong import growth, both for processing trade and for domestic consumption.

Accepted Answer

The statement mentions that China accounts for more than 6 percent of world trade which is remarkable for a developing economy. This implies that China is a major player in the world economy.

Question 3

The distance between the buying and selling firm is significant in terms of time zones and physical location. Internet capabilities usually provide a partial solution.

Accepted Answer

The statement is true as the distance between the buying and selling firms can be significant in terms of time zones and physical location, and the internet can help bridge the gap.

Question 4

Since most offshore deals require the use of a ___________ the buying firm loses the use of funds when the ________ is established.

Accepted Answer

Most offshore deals require the use of a "letter of credit" which involves a bank guaranteeing payment to the seller. This means that the buying firm's funds are kept by the bank until the seller receives payment. Therefore, the buying firm loses the use of funds when the "letter of credit" is established.

Question 5

___________ inventory issues will always occur when a third party (the shipper) is involved. The problems become pronounced when offshore sourcing is used.

Accepted Answer

Pipeline inventory issues are common when a third party is involved in shipping, especially with offshore sourcing, due to the extended time goods are in transit.

Question 6

ommunication can be described as the _______ that holds together a sourcing relationship.

Accepted Answer

Communication is often referred to as the "glue" that holds together a sourcing relationship because it helps to establish and maintain trust, transparency, and clear expectations between parties. Without effective communication, sourcing relationships may break down or become strained.

Question 7

Germany's GNP stands at $825 billion. Their monetary unit is the Real. Typical trading partners include the United States, the U.K., and other countries in the EU. Exports include machinery, motor vehicles, chemicals, iron, and steel products. The United States received $73.3 billion in imports from Germany in 2004.

Accepted Answer

Germany's monetary unit is the Euro, not the Real. The Real is the currency of Brazil.

Question 8

The French GNP is $542 billion. Their monetary unit is the Frank. Typical trading partners are the other EU members, the United States, and Africa. Exports include machinery, transportation equipment, and food. The United States received $28.5 billion in imports in 2004 from France. French exports to the United States increased 56.9 percent from the previous year. This trend is not expected to change because of the cheaper U.S. dollar and the strong French demand.

Accepted Answer

France's monetary unit is the Euro, not the Frank. The Franc was replaced by the Euro in 2002.

Question 9

(Most) of the (global risk) issues are ____________________________.

Accepted Answer

The given options do not seem to adequately fit with the concept of global risks. The most common global risk issues are related to factors such as geopolitical instability, natural disasters, climate change, cyber threats, and economic issues like trade disputes, commodity price fluctuations, and debt crises. Therefore, the best choice is E, which covers all the options without ignoring the key factors.

Question 10

The FTC Act of 1934 created ___________ to encourage exports from foreign countries. The act allowed for the storage of goods within the U.S. boundaries without payment until the goods passed to the buying company.

Accepted Answer

The creation of foreign trade zones was part of the FTC Act of 1934, which aimed to encourage exports from foreign countries by allowing the storage of goods within the U.S. boundaries without payment until the goods passed to the buying company. These zones are designated areas, typically near ports of entry, where foreign and domestic goods can be stored, manipulated, or manufactured without being subject to customs duties or other taxes. This allows companies to defer, reduce, or even eliminate customs duties on imported goods, increasing their competitiveness in the global market.

Question 11

The buying firm must spend the necessary time to correctly specify and articulate quality expectations. Then evaluation makes sure that the sample is from a legitimate production run. Prototypes/lab samples should not be analyzed.

Accepted Answer

The statement is true. The buying firm must spend time to correctly specify and articulate quality expectations, and evaluation should ensure the sample is from a legitimate production run. Prototypes/lab samples should not be analyzed as they are not from the actual production run and may not represent the final product accurately.

Question 12

If a buying firm is to be effective with an offshore sourcing strategy, it must either hire experts or develop specialists that are assigned to offshore suppliers. Ideally, these individuals must have experience in purchasing management, quality control, and basic accounting. This cost also must be considered in the evaluation process.

Accepted Answer

It is true that for an effective offshore sourcing strategy, buying firms need to hire experts or develop specialists with experience in purchasing management, quality control, and basic accounting. The cost of this expertise should also be considered in the evaluation process.

Question 13

The direct and indirect costs (discussed in the textbook) tend to add unexpected costs to purchased items. However, the significant benefits associated with offshore sourcing enable the buying firm to ______________ domestic suppliers.

Accepted Answer

Offshore sourcing can provide a buying firm with leverage over domestic suppliers by offering alternative options and potentially better pricing, which can be used as a negotiating tool.

Question 14

ny business or individual wanting to import goods into the United States will have to work with the Export Administration (EA) of the U.S. Department of Commerce. Several steps that (a company needs) to be aware of are the following:etermine whether the item (s) in question is subject to the exclusive jurisdiction of a State agency.etermine if the technology or software is privately available.or an item in a foreign country, the cost of the item must be determined.or items made in a foreign country, determine whether it is a decontrolled item in the US.etermine whether the foreign made item is subject to selective prohibition.

Accepted Answer

The correct agency for regulating goods imported into the United States is U.S. Customs and Border Protection (CBP), not the Export Administration (EA) of the U.S. Department of Commerce. The Department of Commerce, through its Bureau of Industry and Security (BIS), primarily deals with the export of goods and technologies, especially those that have military applications or contribute to the national security of the United States.

Question 15

ccording to the ________________________, export controls and restrictions may be imposed for a range of specific purposes including national security; protection of life, health, and the environment; and the preservation of national treasures.

Accepted Answer

The 1991 Trade Policy Review of the European Communities outlines that export controls and restrictions can be imposed for various purposes such as national security, protection of life, health, and the environment, and the preservation of national treasures.

Question 16

___________ is the exchange of goods for goods in full or partial payment of a sales transaction. Progressive companies must participate in ____________ or risk losing market share.

Accepted Answer

Counter trade is the exchange of goods for goods in full or partial payment of a sales transaction. Progressive companies must participate in counter trade or risk losing market share as it can be a way to penetrate new markets, maintain or improve relationships with existing customers, and hedge against currency risks.

Question 17

The major problems when doing business in China are the language barrier, business practices, and a fluid and diverse legal system. A well-specified _______________ is a basic requirement when buying from China.

Accepted Answer

A procurement strategy is essential when buying from China as it involves the process of obtaining goods and services from suppliers. This includes identifying suppliers, negotiating terms, and ensuring quality control. Without a well-specified procurement strategy, businesses may struggle to navigate the language barrier, unfamiliar business practices, and complex legal system present in China, which can impact the success of their operations. A game plan, policy and specification statement, competitive strategy, or operational plan may be helpful in other aspects of business, but they do not address the specific challenges of buying from China.

Question 18

When doing business in France, (a buyer) will often go through a (n) _________ whose credentials are impeccable. (The) choice of __________ is important.

Accepted Answer

The best choice when doing business in France would be an intermediary contact with impeccable credentials. This person would act as a go-between for the buyer and other parties involved in the transaction, helping to ensure that everything is done correctly and efficiently. It is important to choose an intermediary with a good reputation in order to ensure a successful business deal.

Question 19

ue to technical expertise, German negotiators are extremely cautious. The opponent should be well prepared on technical details.

Accepted Answer

German negotiators are known for their technical expertise and attention to detail, making them cautious in their approach. As such, it is important for the opponent to be well-prepared and knowledgeable about technical details in order to negotiate effectively with them.

Question 20

When it comes to negotiations Americans can assume that the English and American businesses operate in the same manner.

Accepted Answer

While there may be some similarities in negotiation styles between the English and American businesses, it is not safe to assume that they operate in the same manner. Cultural differences and business practices can vary greatly, which may impact the negotiation process. It is important to do research and approach negotiations with an understanding of the culture and practices of the other party.

Quiz 10: Global Sourcing