Question 1

Which of the following documents is the contract between the shipping company and the exporter?
A)pro forma invoice
B)bill of lading
C)export declaration
D)commercial invoice

Accepted Answer

The bill of lading is the contract between the shipping company and the exporter. It serves as a receipt of goods shipped and outlines the terms of the shipment. The pro forma invoice is a preliminary invoice that is sent to the importer before the commercial invoice. The export declaration is a document that declares the proprietary information of the goods being exported. The commercial invoice is a final invoice that is sent to the importer.

Question 2

Which of the following is the best example of a back-office BPO activity?
A)customer service
B)billing
C)marketing
D)technical support

Accepted Answer

Back-office BPO activities involve support functions such as billing, data entry, accounting, and HR. These activities are not customer-facing and are typically performed in-house by support staff, but can be outsourced to a BPO provider. Customer service, marketing, and technical support are considered front-office BPO activities as they involve direct interaction with customers.

Question 3

Trade fairs are not only excellent sites to meet potential intermediaries, they also provide the means to become familiar with key players in the local industry and to generally learn about the target market.

Accepted Answer

Trade fairs can be a great way to network with potential intermediaries and also to gain insights about the local industry and market.

Question 4

Focal firms typically source from external suppliers for all of the following reasons EXCEPT ________.
A)the product or service obtained is non-core
B)the product can be purchased inexpensively
C)the supplier specializes in providing the product or service
D)the supplier offers the same product to competing firms

Accepted Answer

Focal firms source from external suppliers for reasons such as non-core activities (A), cost efficiency (B), and specialized capabilities (C). The fact that a supplier offers the same product to competing firms (D) is not a typical reason for sourcing decisions; it might even be a concern due to competitive reasons.

Question 5

The bill of lading is the "birth certificate" of the goods being shipped and indicates the country where they originate.

Accepted Answer

The bill of lading is a document that serves as a receipt for goods shipped, a contract between the carrier and the shipper, and a document of title. It does not indicate the country of origin of the goods.

Question 6

________ refers to sourcing from the firm's own production facilities.
A)Captive sourcing
B)Crowdsourcing
C)Business process outsourcing
D)Externalization

Accepted Answer

Captive sourcing refers to sourcing from the firm's own production facilities. It means the company is not outsourcing the production process, but instead is using its own facilities to produce the goods or services required. This is different from business process outsourcing, which involves using external service providers to handle certain business processes or functions. Crowdsourcing involves sourcing ideas or services from a large group of people, often over the internet. Externalization refers to the transformation of internal business processes and functions into external services, which may be provided by external service providers.

Question 7

Which of the following would most likely be considered by the consultants while deciding whether to keep each value-adding activity in the home country or locate it in a foreign country?
A)Who will be responsible for training suppliers in foreign locations?
B)Can different value-adding activities be effectively configured across the world?
C)Would the HR department of Fun Play be able to ensure smooth repatriation for managers after they complete their assignments abroad?
D)What are the odds in favor of Fun Play's dominating the children's toy segment in its home country?

Accepted Answer

The consultants would consider whether different value-adding activities can be effectively configured across the world in order to determine whether to locate them in a foreign country or keep them in the home country. Choices A, C, and D are not directly related to this decision.

Question 8

Which of the following is true with regard to global sourcing?
A)Global sourcing has declined significantly in the current phase of globalization.
B)Global sourcing is a low-control strategy in which the focal firm sources from independent suppliers through contractual agreements.
C)Global sourcing refers to the relocation of a business process or entire manufacturing facility to a foreign country.
D)Global sourcing does not represent the firm's initial involvement in international business.

Accepted Answer

Global sourcing is a strategy in which a firm sources goods or services from independent suppliers located abroad through contractual agreements. It is a high-control strategy where the focal firm manages and coordinates its global supplier network to provide a reliable and cost-effective supply of inputs. Global sourcing has grown significantly in the current phase of globalization due to advancements in communication technology, transportation, and logistics, and a significant reduction in trade barriers. Option A is false as global sourcing has increased significantly in recent years. Option C refers to offshoring, not global sourcing. Option D is not true as global sourcing is often the initial involvement of a firm in international business.

Question 9

The exporter usually first issues a quotation or pro forma invoice upon request by potential customers.

Accepted Answer

This is a common practice in international trade where the exporter provides a quotation or pro forma invoice to potential customers outlining the details of the transaction including price, delivery terms, and payment terms.

Question 10

Which of the following is most likely to be the consultants' utmost concern while deciding if clothing for Fun Play dolls needs to be outsourced?
A)Is doll clothing part of Fun Play's core competencies?
B)What kind of fabric is used for clothing Fun Play dolls?
C)Do the competitors of Fun Play outsource accounting activities abroad?
D)Does Fun Play intend to follow a strategy of product diversification in the near future?

Accepted Answer

The consultants' utmost concern should be whether doll clothing is a core competency of Fun Play because if it is not, outsourcing can save costs and increase efficiency. The other options are not relevant to the decision of outsourcing doll clothing production.

Question 11

National governments require exporters to obtain a license to protect the exported goods against damage, loss, pilferage, and delay.

Accepted Answer

National governments may require licenses for exports for other reasons, such as for security or regulatory purposes, but not specifically to protect against damage, loss, pilferage, and delay. Freight companies may offer insurance or other related services to protect against these risks.

Question 12

If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.
A)offshoring
B)contract manufacturing
C)cause marketing
D)captive sourcing

Accepted Answer

Captive sourcing refers to a situation where a company sources goods or services from its own wholly owned subsidiary. This allows the company to have more control over the quality and production of the goods or services, as well as potentially saving costs. Offshoring involves moving production or services to a different country, contract manufacturing involves outsourcing to a third-party manufacturer, and cause marketing involves aligning marketing efforts with a social cause.

Question 13

Prox Inc. is a U.S.-based manufacturer of consumer electronics. It decides to export to Mexico and wants to protect its goods against damage, loss, and pilferage. Which of the following documents is applicable here?
A)insurance certificate
B)bill of lading
C)pro forma invoice
D)license

Accepted Answer

An insurance certificate is a document that provides proof of insurance coverage for goods being transported internationally. In this case, Prox Inc. wants to protect its goods against damage, loss, and pilferage during transportation to Mexico, so an insurance certificate would be applicable. The other documents listed (bill of lading, pro forma invoice, and license) may be necessary for the export process, but do not directly address the issue of protecting the goods during transportation.

Question 14

The growth of global sourcing has been driven by ________.
A)the declining demand for highly skilled workers
B)the rapidly aging population in advanced economies
C)technological advances in communications
D)the rising costs of international business

Accepted Answer

Technological advances in communications have made it easier and more cost-effective for companies to communicate and collaborate with suppliers and partners located in different countries.

Question 15

Contract manufacturing can best be defined as ________.
A)the outsourcing to independent suppliers of business service functions such as accounting, payroll, human resource functions, travel services, IT services, customer service, or technical support
B)the relocation of a business process or entire manufacturing facility to a foreign country
C)sourcing from the firm's own production facilities
D)an arrangement in which the focal firm contracts with an independent supplier to manufacture products according to well-defined specifications

Accepted Answer

Contract manufacturing is an arrangement in which a firm hires an independent supplier to produce products according to the defined specifications. It involves outsourcing the production process to a third-party manufacturer. The third-party manufacturer typically provides expertise in manufacturing, logistics, and supply chain management. This allows firms to focus on other aspects of the business such as marketing, sales, and research and development.

Question 16

If a computer contains a microprocessor from Costa Rica and a hard disk drive from the Philippines, the computer manufacturer, who is based in Texas and operates across Europe and West Asia, most likely uses ________ as an entry strategy.
A)exporting
B)franchising
C)global sourcing
D)licensing

Accepted Answer

Global sourcing involves sourcing materials, components, or products from different countries based on cost or quality advantages. In this case, the computer manufacturer is sourcing the microprocessor and hard disk drive from different countries. Exporting would involve the manufacturer selling products to other countries, while franchising and licensing involve giving the rights to use a company's products or services to another entity.

Question 17

The procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers is known as ________.
A)outsourcing
B)franchising
C)offshoring
D)licensing

Accepted Answer

Outsourcing refers to the practice of contracting out specific value-adding activities, including production of intermediate goods or finished products, to independent suppliers. Franchising involves the licensing of a business model or brand to a franchisee in exchange for a fee or share of profits. Offshoring refers specifically to the outsourcing of business processes to suppliers in foreign countries. Licensing involves granting permission to a third party to use a company's intellectual property.

Question 18

Incoterms are universally accepted terms of sale that specify how the buyer and the seller share the cost of freight and insurance in an international transaction and at which point the buyer takes title to the goods.

Accepted Answer

This statement accurately describes the purpose of Incoterms.

Question 19

In a short essay, explain why most firms use exporting as part of their internationalization portfolio, and discuss how Incoterms have mitigated problems with logistics.

Accepted Answer

The answer of In a short essay, explain why most...

Question 20

Incoterms were developed by the International Chamber of Commerce in order to ________.
A)provide permission to export
B)standardize the cost of shipping and insuring exported items
C)define how the buyer and seller share freight and insurance costs
D)reduce the costs of shipping and insuring exported products

Accepted Answer

Incoterms are a set of rules that define the responsibilities and obligations of the buyer and seller in international trade. This includes the sharing of freight and insurance costs, among other things. The goal of Incoterms is to provide a standardized system that can be understood by businesses around the world, reducing the risk of misunderstandings and disputes.

Quiz 13: Exporting and Global Sourcing

Which of the following documents is the contract between the shipping company and the exporter?

Which of the following is the best example of a back-office BPO activity?

Trade fairs are not only excellent sites to meet potential intermediaries, they also provide the means to become familiar with key players in the local industry and to generally learn about the target market.

Focal firms typically source from external suppliers for all of the following reasons EXCEPT ________.

The bill of lading is the "birth certificate" of the goods being shipped and indicates the country where they originate.

________ refers to sourcing from the firm's own production facilities.

Which of the following would most likely be considered by the consultants while deciding whether to keep each value-adding activity in the home country or locate it in a foreign country?

Which of the following is true with regard to global sourcing?

The exporter usually first issues a quotation or pro forma invoice upon request by potential customers.

Which of the following is most likely to be the consultants' utmost concern while deciding if clothing for Fun Play dolls needs to be outsourced?

National governments require exporters to obtain a license to protect the exported goods against damage, loss, pilferage, and delay.

If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.

Prox Inc. is a U.S.-based manufacturer of consumer electronics. It decides to export to Mexico and wants to protect its goods against damage, loss, and pilferage. Which of the following documents is applicable here?

The growth of global sourcing has been driven by ________.

Contract manufacturing can best be defined as ________.

If a computer contains a microprocessor from Costa Rica and a hard disk drive from the Philippines, the computer manufacturer, who is based in Texas and operates across Europe and West Asia, most likely uses ________ as an entry strategy.

The procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers is known as ________.

Incoterms are universally accepted terms of sale that specify how the buyer and the seller share the cost of freight and insurance in an international transaction and at which point the buyer takes title to the goods.

In a short essay, explain why most firms use exporting as part of their internationalization portfolio, and discuss how Incoterms have mitigated problems with logistics.

Incoterms were developed by the International Chamber of Commerce in order to ________.