What is the rational for increased revenue? - answer--open up more markets
-expand beyond competitors
-obtain accessibility to markers that limit access without local operations
What is the rationale for achieving economies of scale? - answer--take advantage of available production
capacity
What is the rational for reducing direct cost? - answer--take advantage of lower labor rates or real estate
expenses
-reduce energy requirements by reducing distance or changing transportation mode
-take advantage of difference in production requirements
Global Sourcing Reasons for Expansion - answer-1. Increase revenue
2. Achieve economies of scale
3. Reduce direct cost
4. Advance technology
5. Reduce firm's global tax liability
6. Reduce market access uncertainty
7. Enhance sustainability
What is the rational for advancing technology? - answer--obtain access to advance technology that may
nor be available from current locations due to historical investments
-obtain access to specialized expertise or language skills
,What is the rationale for reducing a firm's global tax liability? - answer--obtain local or regional tax
benefits related to property, inventory, or income
-obtain reductions in value-added-taxes due to localized production or other value-added services (i.e.
packaging, inventory management, customization)
What is the rationale for reducing market access uncertainty? - answer--source product from location
that involves less transportation uncertainty
-secure product from location that involves fewer security constraints
What is the rationale for enhancing sustainability? - answer--source production or other resources
(including Human Resources) from locations that have ongoing availability of material and expertise such
as energy or trained workers
Trends in global supply chains and global sourcing - answer-Increasing globalization leads to longer
supply chains and more opportunities for disruption
-Globalization of supply chains is well-documented 61% of North American manufacturers have moved
production to lower-cost locations
-Nearly half of North American manufacturers sell product to China
Cost considerations of global supply chains and global sourcing - answer--Piece price isn't everything
-Influenced by quantity, surcharges, and expedited shipments
-Tooling -- who owns, who pays?
-Packaging -- distance, handling, protection, and disposal
What are the pre-transaction costs associated with global supply chains and global sourcing? - answer-all
low
Investigating sources, Qualifying sources, Training/education
What are the transaction costs associated with global supply chains and global sourcing? - answer-high:
price
, low:
Order processing, Transportation, Inventory, Tariffs/duties, Billing/payment
super low:
Inspection, Return of parts, Follow-up and correction
What are the post-transaction costs associated with global supply chains and global sourcing? - answer-
low:
Defective finished goods, Maintenance
super low:
Line fallout, Field failures, Repair in field, Reputation
What are the ongoing costs associated with global supply chains and global sourcing? - answer-low:
Monitoring, Problem solving, Traveling, Legal fees, Communication and translation
super low:
Corruption, Bureaucracy, Complex coordination
Hidden Costs of global supply chains and global sourcing - answer-Factory-gate price
Inventory cost
Transportation costs
Risk costs
Other Costs
What is Factory-gate price? - answer-the unit price per item coming out of the factory
What is Inventory cost? - answer-cost of pipeline inventory, safety stocks and expediting costs
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Nurseking. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $16.49. You're not tied to anything after your purchase.
