Chapter 14: International Logistics

Question 1

Macro-environmental Influences

Answer 1

uncontrollable forces and conditions facing an organization and include cultural, demographic, economic, natural, political, and tech factors

Question 2

political factors

Answer 2

Tariffs, import quotas, embargoes, subsidies, fed government cross-border trade involvement

Question 3

Import quota

Answer 3

limits amount of product that can be imported from a country during a period of time

Question 4

Embargoes

Answer 4

The prohibition of trade between particular countries

Question 5

Balance of Payments

Answer 5

System of accounts that records a country’s international financial transactions

Question 6

Economic factors

Answer 6

Currency flucuations, market size, income, infrastructure, economic integration

Question 7

Cultural factors

Answer 7

language, national holidays, time orientation

Question 8

International Documentation

Answer 8

required at Point of Importation

• Commercial invoices
• Certificates of origin
• Shipper’s export declaration (SED)
• Shipper’s letter of instruction (SLI)

Question 9

Terms of sale

Answer 9

Referred to as Incoterms - 1930's, 
Parties involved
logistics channels
determines when and where to transfer the following
- physical goods
- payment
- legal title of goods
- docs
- responsibility of goods (livestock)

Question 10

Incoterms 2010

Answer 10

Group 1: organized by modes of transport (any)

Group 2: uses terms in both international and domestic (inland and sea transport)

Question 11

Method of payment

Answer 11

refers to the manner by which a seller will be paid by a buyer

• Cash in advance
• letters of credit
• bills of exchange
• open account

Question 12

Cash in advance

Answer 12

buyer sends payment in the agreed currency and through agreed method to a seller before the product is manufactured and/or shipped

Question 13

letters of credit

Answer 13

a letter issued by a bank to another bank (typically in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.

Question 14

Bills of exchange

Answer 14

a written order to a person requiring the person to make a specified payment to the signatory or to a named payee; a promissory note.

Question 15

open account

Answer 15

a sale where the goods are shipped and delivered before payment is due

Question 16

International freight forwarders

Answer 16

Specialize in handling either vessel shipments or air shipments

Question 17

nonvessel operating common carrier

Answer 17

often confused with freight forwarder

consolidates freight from different shippers and leverages volume to negotiate favorable rates

Question 18

export management company

Answer 18

firm that acts as the export sales department for a manufacturer

Question 19

Logistics Performance Index

Answer 19

Measures a country’s performance across six logistical dimensions

• efficiency of the clearance process by border control agencies
• quality of trade and transport related infrastructure
• ease of arranging competitively priced shipments
• competence and quality of logistics services
• ability to track and trace consignments
• timeliness of shipments in reaching destination within the scheduled or expected delivery time