SCM 386 CH 10

The buying professional who is considering offshore sourcing must be prepared to fully analyze both the _______________ factors.

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

According 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.

One of the most important variables to consider is the exchange rate of currencies. Since predicting the fluctuation in currency markets is relatively easy, foreign purchases may actually cost less than negotiated depending on the length of the contract.

There are many ethical considerations that (companies) must learn in order to be successful. This is one reason that many companies hire _________ to do their sourcing.

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.

The costs of global sourcing include some of the same costs found in domestic sourcing; there are also costs that are different. These costs are grouped into the following categories: _________________.

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.

The intense attention on the outflow of work to overseas locations has generated ________ about which jobs or professions will be outsourced next.

The associated qualitative risk profiles of _____________________ in some foreign countries must be evaluated.

Lead times and delivery times can create problems also. Longer times can _______________________. The extended lead time also might push back the date at which a firm is able to introduce new products to the market.

____________ is a form of agreement that involves the purchaser being given a share in the manufacture of a foreign designed product.

Exclusively foreign costs are those that would not be incurred if a domestic source were found. Examples of these costs are _________________.

Some of the more popular forms of counter trade are as follows with one exception. Which one is the exception?

When the dollar has a weak performance over the life of a contract, a firm can realize savings through the exchange rates

Direct labor and materials costs, lead-time costs, transportation costs, and inventory costs are a part of both domestic and offshore sourcing. _________________ tend to be higher when sourcing globally.

__________ is when the seller exchanges products for compensatory amounts of commodities.

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

When the dollar is weak, the final cost of goods tends to be relatively less than originally agreed upon.

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

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

The general uncertainty associated with the ______________ makes offshore sourcing a risky proposition.

_________ is the non monetary exchange of goods-for-goods.

China 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

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

Any 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: 1. Determine whether the item (s) in question is subject to the exclusive jurisdiction of a State agency. 2. Determine if the technology or software is privately available. 3. For an item in a foreign country, the cost of the item must be determined. 4. For items made in a foreign country, determine whether it is a decontrolled item in the US. 5. Determine whether the foreign made item is subject to selective prohibition.

_______________ occur where products or services transferred in an offset arrangement are unrelated to the specific products referred to in the export agreement.

Firms can run into problems when global sourcing is introduced into their organizations. The resistance of the firm s buyers to learn to evaluate global sources is the reason for most of the problems. An attitude of if it can t be bought here in the U.S.A., it can t be bought anywhere can be seen with some purchasing departments.

Most of the global risk issues are _____ all of the above_______________________.

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.

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

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.

___________ 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.

Depending on the performance and strength of the dollar, goods can cost American firms different amounts from what s expected.

___________________ is when the recipient obtains a share of the production work for its own order.

________________________ occur as a result of an offset are research and development agreements conducted in the buying country.

_____________ is when a prime contractor substitutes an existing supplier with one located in the buying country.

The focus has been on a single aspect of outsourcing: the __________ of jobs, and, in particular, the outsourcing of ___________ jobs.

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

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.

Many of the exclusively foreign costs are established by ___________ and are very difficult to avoid.

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.

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

A few countries, notably ______________, are often targeted as the ones that are displacing American workers by offering cheap labor. Japan and China

_________ are commercial compensation practices required as a condition of purchase of goods and services.

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

A third problem companies face in global sourcing is ___________. Many times there are delays and confusion in translations.