SCMN Test 3 Questions with All
Correct Answers
What is Global SCM? - Answer-Global SCM focuses on planning, implementing, and
controlling the cross-border flows of materials, money and information between
companies in different countries.
How is global SCM different from domestic SCM? - Answer-Global SCM focuses on
planning, implementing, and controlling the cross-border flows of materials, money and
information between companies in different countries.
T/F With increased global competition and pressure to reduce costs, become more
competitive and innovative, many companies are turning to off-shore, and near shore
based outsourcing vendors. - Answer-True
T/F You do not need to evaluate and analyze the rewards and risks of global sourcing,
outsourcing, and vendor management. - Answer-False
What do "landed costs" include? - Answer-per-unit cost of a product, freight, taxes,
import and export duties, insurance, payment processing and handling fees, exchange
rates and storage fees
What is the purpose of global sourcing? - Answer-Lowering supply chain costs
What risks must be considered for global sourcing? - Answer-Lead time, Expenses,
Damage, and Theft, Visibility
What are the drivers of global production? - Answer-1. Access to lower wage rates
2. Access to customers in emerging markets
3. Reduction in transport and communication costs
4. Reduction in trade barriers
5. Availability of resources
6. Diversification to mitigate risks
T/F Successful global sourcing requires that a companyanalyze the pros and cons of
going international,following a logical sourcing process, and establishingcross-border
capabilities. - Answer-True
, What are your global production alternatives in managing risk, investment and control? -
Answer-1. Damage Protection- Proper packaging, international markings, waterproofing
2. Limit Theft Opportunities- Avoid high risk routes, congested ports, unknown carriers,
and blatant marketing on cartons
3. Manage Financial Risk- Use appropriate INCOTERMS and purchase insurance,
otherwise you are at high risk and must self-insure
Know how to calculate an Exchange rate. - Answer-Given totals.
What are INCOTERMS? - Answer-International Commercial Terms
Created by International Chamber of Commerce
What do INCOTERMS do for organizations? - Answer-Specify risks and responsibilities
for international transport
INCOTERMS Group C - Answer-Main Carriage Paid
CFR, CIF, CPT, CIP
Seller responsible for getting goods through port of export to port of import.
INCOTERMS Group F - Answer-Main Carriage Unpaid
FCA, FAS, FOB
Seller responsable for packaging and getting the goods to a name place, normally a
port.
Buyers are then responsible from named place to their home.
INCOTERMS Group E (EXIT) - Answer-Departure Terms
EXW
Buyer has full responsibility from door of seller
INCOTERMS Group D (DELIVER) - Answer-Arrival
DAT, DAP, DDP
Seller takes full responsibility to get product to buyers location
What are the primary documents used in global trade? Why are they important? -
Answer-1. Commercial Invoice
2. Bill of Lading
3. Insurance Certificate
4. Certificate of Origin
5. Letter of Credit
When you see the letter "I" in an INCOTERM, what does it stand for? - Answer-
Insurance
If a ship gets hit by a typhoon off the coast of Hawaii, who is responsible for the costs of
salvage, ship repair, and freight claims? - Answer-The freight owners
