Exam (elaborations)
SCMN 3730: Exam
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Exam of 11 pages for the course SCMN 3730 at SCMN 3730 (SCMN 3730: Exam)
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SCMN 3730: ExamGlobal 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 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
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
What are Transportation costs? - ANSWER costs of global shipping which can be
volatile
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