SCMT 3643

The 7-Rs of supply chain management include
-right place -right time -right quantity -right quality -right price -right condition -right customer
The international environment presents challenges for the international logistician. Which aspect of the international business environment is most likely to create the greatest frustrations?
cultural differences
The EPA’s SmartWaySM Transport Partnership program is a voluntary effort between the government and the transportation industry to develop and implement methods to improve air quality and reduce greenhouse gas emissions in transportation.
True
Transportation spend account for nearly two thirds of logistics dollar in the United States’ gross domestic product (GPD).
True
Inventory carrying costs account for nearly two thirds of logistics dollar in the United States’ gross domestic product (GPD
False
The complexity of logistics and transportation. are often accentuated as Global supply chains increase in length (distance and time).
True
The faster it moves the greater the transportation spend
True
Logistics cluster theory suggests an area can develop a substantial competitive advantage by providing several logistics service providers in one area. The area then attracts export- and import-minded manufacturers.
True
International trade is still mostly concentrated among the developed countries of the Northern Hemisphere. Which country is the largest importer of the world?
United States
Inbound logistics refers to the finished products inbound to the final customer
False
Infrastructure is a collective term that refers to all of the elements in place (publicly or privately owned goods) to facilitate transportation, communication, and business exchanges.
True
The majority of containerships currently in use are post-Panamex ships.
False
When a company has a subsidiary in a foreign country, as far as the foreign country’s government is concerned that subsidiary is ___.
importer of record
A tailored approach, where an agent is used in some countries, a distributor in others, and a marketing subsidiary in the remainder is a strategy some firms us for entering foreign markets contrasted to a standardized approach. The decision depends on the characteristics of the market and resources.
True
Cultural issues are not considered to be challenging for international logistician.
False
China’s share of global manufacturing exports has risen from 2% of the world’s total exports to over 50% in 2010.
False
A lazy executive thinks about sourcing globally based on the idea of reducing costs.
True
Internet services are extremely reliable for global business services thanks to the acceptance of cell phones.
False
Of the following, the best definition of a logistics infrastructure would be that it consists of
all of the elements in place to facilitate transportation, communication, and business exchanges
Because agents tend to be individuals or very small firms, governments in some countries put them under ___.
labor law
Our guest speaker, Gary Maxwell shared with you one of his most important learnings while working in various Walmart international markets was “fit your Brands to the Culture.”
True
Global railroads are important for expediting trade and every country in the world uses the same gage (width of tracks).
False
According to international convention, every ship must be registered in a specific country and fly that country’s flag. The country in which a ship is registered determines applicable onboard ship laws, taxes the owners pay and regulations followed onboard a vessel.
True
The Heckscher-Ohlin Theory holds that counties that have an abundance of certain resources enjoy an absolute or comparative advantage over other countries. Which of the following not one of the factors that Heckscher and Ohlin considers scarce?
Education
Container ships carry 60% of the world’s trade.
True
Dry Bulk Carriers carry coal, agricultural product, ores, scrap iron, and other bulk commodities.
True
The idea that containerized ocean cargo needs to take a shortcut across a landmass by rail has resulted in the development of bad bridges.
False
NVOCCs are:
Stands for Non Vessel owning Common Carrier; operation comprises of sales, stuffing transport of the containers to gateway ports
The Transportation Infrastructure allows businesses to sustain their daily operations. This requires reliable electricity, energy (natural gas), water, and sewer services.
False
The most common type of ship charters are time charters and voyage charters.
True
Flags of Convenience is a designation of the open registry of a country that has lower taxes and more lenient on-board regulations than other countries with open registries.
True
A Dry Lease agreement in which the owner of the aircraft provides only the airplane to the lessee, who is responsible for all other costs.
True
In 1945, representatives of 31 scheduled carriers assembled in Havana to officially organize the International Air Transport Association (IATA) to address route structures and fares.
True
The Warsaw Convention of 1929 limited the liability of international airlines in accidents.
True
In countries with poor traditional telephone services, communications infrastructure has rapidly been developed through
Cellular telephones
In calculating airfreight rates, airlines figure the volume-weight of the shipment based on the volume yielding a certain weight value. As a result, ___.
the airline will charge the higher of the volume-weight or the actual weight of the cargo
International trade is still mostly concentrated among the developed countries of the Northern Hemisphere. Which country is the largest importer of the world?
United States
The Carriage of Goods by Sea Act (COGSA) became U.S. law in 1936 and signified the U.S. agreement with the Law Relating to Bills of Lading known as the Hague Rules from the 1924 Hague international liability convention.
True
United and Delta Airlines are examples of integrated air cargo carriers.
False
The following are functional areas often classified as Inbound Logistics
Purchasing
Ships too large to pass through the Panama Canal are called ___.
Post-Panamax Ships
It is possible to hedge against rises in charter rates through the Baltic Exchange, where shippers can buy future contracts for shipping capacity.
True
The greatest net profit growth and margin remains in North America.
False
Documentary collection is a process by which the exporter asks bank to protect its interests in importing country by not releasing documents (specifically bill of lading which is certificate of title to the goods) until importer meets certain requirements
True
A consular invoice is a regular commercial invoice printed on stationery provided by a country and visa-ed by its consulate in the exporter s country.
True
The sentence This merchandise licensed by U.S. for ultimate destination [country]. Diversion contrary to U.S. Law prohibited is ___
Destination Control Statement
In most cases, an intermodal bill of lading ___.
is a straight bill of lading when the name of the consignee is specified.
Weight and dimensional packaging information is necessary in order to build pallets effectively for international shipping.
True
A commercial invoice for exporting does not contain financial data.
False
In the U.S. trucking accounts for 38% of all freight in tons moved, but only 7% of transportation revenue paid.
False
The European Community has recently introduced the concept of ___ that run trains straight through from major ports to cities such as Milan and Vienna without changing locomotives and crews at each border.
Freight corridors
Economies of scale of larger ships that cannot go through Panama Canal may be substituted with a land bridge via rail from the port of Seattle to an East Coast U.S. port.
True
Oversize cargo is shipped on a “flat rack” container.
True
A TEU is a twenty foot container.
True
Malcom McLean demonstrated that it was feasible to move ocean freight in containers for about 15.8 cents per ton compared to about $5.83 per ton with conventional processes of the time.
True
The sentence “This merchandise licensed by U.S. for ultimate destination [country]. Diversion contrary to U.S. Law prohibited” is
a destination control statement
In order for an importer to come under the scope of informed compliance, it must show that it has exercised reasonable care in the filing of its Customs entries.
True
A packing list contain financial data.
False
The U.S. State Department recently eliminated their foreign services division charged with assisting small and medium size U.S. companies interested in exporting to foreign countries.
False
A medical device is not legal in country A, but is legal in country b. Despite being restricted from country A, the product is allowed to go through the foreign trade zone of country A on its way to country B.
False
Documentation designed to indicate what country a product initially came from is contained in the ___.
Certificate of Origin
The main billing document in a shipment is the pro forma invoice.
False
SDR, an artificial currency, is designed to supplement the U.S. dollar in its role as the international currency.
True
The United States requests the “sewing tickets” for some garments, an internal work document of the garment factory, as well as the time cards of the employees working there in an attempt to determine the country of origin of textile products. This can be an example of a non-tariff barrier.
True
The complexity of logistics and transportation. are often accentuated as Global supply chains increase in length (distance and time).
True
The Export-Import Bank (Ex-Im) is a United States federal agency whose purpose is to provide assistance to U.S. exporters in the form of loans, loan guarantees, and political risk insurance policies.
True
As a company grows in exporting sophistication, it should not become involved with an export trading company because
customers abroad are customers of the export trading company, not the exporter.
A cargo service that allows an exporter to ship a large quantity of goods to a location not normally served by cargo airlines would be ___.
charter airfreight service
Intermodal containers sometimes collapse in rough seas.
True
Successful supply chain strategies cannot be expected to simultaneously lower costs, increase service levels and reduce inventory quantities.
False
Most cargo tends to be shipped by air in its
secondary packaging
Of the following, the best definition of a logistics infrastructure would be that it consists of
all of the elements in place to facilitate transportation, communication, and business exchanges.
The converted tanker ship Ideal X carried 58 containers on April 26, 1956 from the Port of Newark; loading each container on board in about 7 minutes.
True
Cigna is a marine insurance company. Lloyd’s and the International Underwriting Association are involved in forms of insurance.
True
The total capacity of the ship expressed in long tons is called ___.
deadweight tonnage
Companies will often seek to sell or source oversea to reduce costs.
True
The faster it moves the greater the transportation spend
True
An exporter can conduct its international business in a manner similar to the way it and most companies conduct domestic business by using ___.
An open account
It is possible to find insurance for improper packing.
False
Performance measurement is important because:
Lower-level metrics in an organization must connect directly to the high-level performance to achieve goals
Which of the following are not key attributes of supply chain management?
o Inventory control
o Leveraging technology
o Customer power
o A long-term orientation
Logistics can be crucial to achieving desired levels of performance in supply chains.
True
The only water link between the Black Sea and the oceans is:
The Bosporus Strait
When a successful exporter involves one of its suppliers (or a company that makes a complementary product) in the markets that this exporter has developed, it results in a form of piggy-backing sometimes called collaborative exporting.
True
When a firm realizes that it wants to exploit the possibilities that sales abroad can bring, and decides to become directly involved in its exporting activities, it is said to be involved in:
Active Exporting
The global consulting group, Booz Allen and Hamilton defined a rationale for global sourcing that included:
All of these
A certificate of insurance is a document provided by the insurance company of the exporter that attests that the goods are insured during their international voyage. This certificate is obtained only at the request of the importer, and for transactions under certain Incoterm terms of trade, such as CIF and CIP.
True
A consular invoice is a regular commercial invoice printed on stationary provided by a country and visa-ed by its consulate in the exporter’s country.
True
A standard TEU container is 8 feet wide (2.44 meters) and 8.5 feet tall (2.59m).
True
According to Eurostat 2012 statistics of freight carried in millions of tonnes railroads accounted for only about 7% of total freight hauled in Europe.
True
According to the United Nations ocean export commission all international shipments must have an insurance policy.
False
An Airway Bill fulfills same functions as ocean bill of lading but for air freight and is always a straight air waybill.
True
Another land bridge is across Russia to connect Europe and Africa
False
Another land bridge is via North Korea from a land bridge from South Korea over Russia’s Trans-Siberian railway to Europe.
False
Documentary collection is a process by which the exporter asks bank to protect its interest in importing country by not releasing documents (specifically bill of lading which is certificate of title to the goods) until importer meets certain requirements.
True
Drafts are sometimes used to provide customers (importers) access to lower cost money in the exporter’s home country
True
End-Use Certificates _____.
Certify that the product is going to be used for a legitimate purpose
Export quotas can be used to control scarce resources or prices of products for which a country has a monopoly.
True
In most cases, an intermodal bill of lading _____.
Is a straight bill of lading when the name of the consignee is specified
In the U.S. rail accounts for 33% of al freight in tons moved, but only 7% of transportation revenue paid.
True
Intermodal describes a shipment that takes several different means of transportation (road, rail, ocean, air) from is point of departure (seller/exporter) to its point of destination (buyer/importer).
True
Ocean containers must have palletized freight to ship legally.
False
The amount of duties charged by U.S. Customs depends on:
o The type of goods; their classification
o The value of the goods; their valuation
o The country from which the goods originated; the rules of origin
Sometimes a third bank, in addition to the issuing bank and the advising bank, becomes involved with a letter of credit. This bank is called a _____.
o Primary bank
o Amending bank
o Intermediary bank
o **None of these
o Secondary bank
The converted tanker ship Ideal X carried 58 containers on April 26, 1956 from the Port of Newark; loading each container on board in about 7 minutes.
True
The European Community has recently introduced the concept of _____ that run trains straight through from major ports to cities such a Milan and Vienna without changing locomotives and crews at each border.
Freight corridors
The sentence This merchandise licensed by U.S. for ultimate destination [country]. Diversion contrary to U.S. Law prohibited is ____.
Destination Control Statement
Which of the following are international documents?
o Commercial invoice
o Packing list
o Airway bill
Which of the following pieces of information does an international commercial invoice contain?
o Incoterms
o Terms of payment
o A precise description of the product
o Weight and measurements of the product
An international airway bill
Is non-negotiable
A forward market hedge consists of selling forward the currency that will eventually be collected from a foreign receivable.
True
EAR stands for Export Administration Regulations, and it contains the Commerce Control List, which details which commodities and product can and cannot be certain countries.
True
Generally speaking, countries with scarce foreign currency resources will attempt to limit the granting of import licenses to companies that have generated export revenues and ___.
Companies purchasing goods for which no close domestic substitute is available
Goods imported in the United States are valued on an FAS or CFA basis, or the value of the goods as they were leaving the exporting country compared to most of the rest of the world that uses the value when entering the importer’s country.
True
International exchange rates began to float ___.
o And it changed the role of the International Monetary Fund
o At the end of the gold standard
o In 1971
Letters of credit are used:
o When sellers are not familiar with buyers and want to use banks as a trusted intermediary to ensure payment
o By governments in some instances to control the flow of foreign currencies in and out of their countries
o By international conglomerates as a way to control their cash flow
Logistics in the 1980s was split between Inbound Logistics and Outbound Logistics.
True
Special Drawing Rights (SDRs) of the IMP are an artificial currency whose value is determined by the value of a basket of four currencies: the euro, the Japanese yen, the U.S. dollar, and the British pound.
True
SWIFT is the Society for Worldwide Interbank Financial Telecommunications.
True
The Export-Import Bank (Ex-Im) is a United States federal agency whose purpose is to provide assistance to U.S. exporters in the form of loans, loan guarantees, and political risk insurance policies.
True
The IMF was created to oversee the fixed exchange rate system created by the Bretton-Woods Conference. Today it helps countries manage their balance of payments and lends them money when they experience difficulties with their balance of payments.
True
The International Maritime Dangerous Goods Code regulates the shipment of dangerous goods by ocean.
True
The stated goal of the European Union is to eventually transform the euro to be a challenger to the U.S. dollar in its role as a preferred third-country currency.
True
The U.S. State Department offers assistance to small and medium size companies interested in exporting to foreign countries.
True
The United States requires a Shippers Export Declaration.
True
We discussed some basic definitions, including
o Supply chain management is the integration of business processes from end user through original suppliers that provide products, services, and information that add value for customers.
o Logistics which can be summer up as follow the inventory.
o Logistics is the management of the flow and storage of inventory so that total costs are minimized and customer services are achieved
When the invoice’s value is much below what Customs has historically accepted and when a much higher valuation is reached with one of the alternative valuation methods, customs can determine that the exporter is dumping the goods in the importing country.
True
Which one of the following functional areas is not classified as Outbound Logistics?
Purchasing
A cargo service that allows an exporter to ship a large quantity of goods to a location not normally served by cargo airlines would be ___.
Charter airfreight service
A freight consolidator is almost always quite good at packaging a container properly, with proper dunnage and protection, but the owners of other cargo on board the consolidated container may not be as careful, and that represents a hazard.
True
According to John Waite, chief surveyor of the Salvage Association, the biggest hazard(s) for container ships is/are
Fire
Among the companies that are exposed to risks in currency fluctuation are ___.
o Firms that have management that is not well-versed in the intricacies of international trade
o Firms that do not evaluate international currency transaction risks clearly and that do not follow a specific policy on currency exchange
An intermediary that purchases goods in the exporting country and resells them to a customer in a foreign country is called a(n) ___.
o None of these***
o Principal
o Export management corporation
o Agent
o Contract manufacturer
As a company grows in exporting sophistication, it should not become involved with an export trading company because
Customers abroad are customer of the export trading company, not the exporter
LNG and LPG ships ____.
Often operate on long-term contracts
At Lloyd’s, individuals assuming (insuring) risks are on their personal fortunes called ___.
Bespoke Names
Of the following, the best definition of a logistics infrastructure would be that it consists of
All of the elements in place to facilitate transportation, communication, and business exchanges
On occasion, a firm will respond to a competitor’s move by retaliating. For example, Linde Gas (an American firm producing industrial gasses) entered the French market when Air Liquide (a French company in the same industry) decided to enter th U.S. market. Such a move is considered a ___.
Competition driver
Packaging designed to appeal to and be functional for consumers is called
Primary packaging
Ship dedicated to the transport of petroleum products are called ___.
Crude carriers
Since most airports are geographically close to large cities, their hours of operations are generally limited by ________ constraints.
Noise
Some countries regulate primary package sizes by requiring them to be multiples of simple metrics units.
True
The concept of general average is exclusively used in marine insurance.
True
The International Product Life Cycle Theory explains why there are no televisions manufactured in Great Britain and the United States, although that technology was invented in those countries.
True
The three functions of correct packaging are
To protect goods in transit, to facilitate proper handling of goods in transit, and fulfill the shipper’s customer service strategy
TradeCard, created in 1994, combines document handling and payment in one process and utilizes electronic transmission of documents and guarantees payment to the exporter.
True
cargo freighters carry nearly 60% of global air freight
true
The 2013 boeing global forecast confirms that continuing trend toward smaller passenger aircraft
false
With the advent of cell phones and the internet, mail service is no longer of concern in most countries
false
Fedex is an integrated carrier
true
Only 50% of petroleum producers own their own ships, the rest are charters
false
Certified cargo screening facilities are charged with
conducting 100% inspections of all shipments that will eventually travel on passenger aircraft
Important functions of IATA today, include setting airport, crewing, and navigation safety standards
true
The aircraft can carry freight and passengers on the main deck are called mixed aircraft
false – combi
In its absolute form, the exchange rate determination theory of purchasing power parity
all of these
The commercial invoice
none of these (accompanies the shipment)
An intermediary that purchases goods in the exporting country and resells them to a customer in a foreign country is called
export trading company
The tax an importer must pay in order to be allowed to let goods into the country is called a duty
true
an experienced exporter knows that the u.s. government almost always checks the paperwork that the exporter provides to the importer
false
A letter of credit contains the following information
the consignee and consignor
If the exporter and the importer agree that a transaction will be in the currency of the exporters country, the exporter then bears all the risk of exchange rate fluctuation.
false
In addition to being a contract of carriage and a receipt for the goods, an ocean bill of landing is
a packing list for the carrier
In the United States, the Federal Reserve System technically fulfills the role of being a central bank
true
A country may use import documents to enact a protectionist policy
false
From the view point of the seller open accounts is the best payment method
false
A standby letter of credit is similar to a “simple”letter of credit except for
all of these
A packing list always accompanies a shipment
True
in 1996, the Export Administration Regulations(ERA) was revised to a U.S. export policy stating that everything is authorized unless it is specifically prohibited
true
Besides a contract and a receipt for goods, an ocean bill of landing is
A certificate of title
A pro-forma invoice is not a true invoice (it is a quote) and the expiration date on a pro forma invoice is very important
True
The harmonized commodity description and coding system also called HS uses up to 10 digits. the first 6 digits are the same in all countries while the last 4 are country specific, used to differentiate different subcategories of main product
True
The international bank of Reconstruction is known as the World Bank and was founded after the Bretton woods conference to help countries rebuild their infrastructures after WW2
True
Most duty is collected ad valorem which means
it is based in the value of the import
Among freight often carried in the belly of scheduled international passenger airplanes are
critical machine or computer parts and fresh produce like fish
An export management company earns its revenue through
sales commission