Exam 1 Flashcards
TFPIA
Textile Fiber Product Identification Act; fiber content in descending order, generic name of fibers, manufacturers or importers name or registered number, COO
soft goods chain
Includes the manufacture of
textile or apparel products from the fiber stage
through completion of end-use products, and
includes retailing or other distribution places
trade surplus
Exports exceed imports
trade balance
Exports equal imports
trade deficit
Exports are less than imports
Levels of development
Developed, developing, newly developing
GNP
Gross National Product; value of the average output produced by domestic residents within a nation, profits of domestic firms even if made outside the nation; does not include output of foreigners producing within the nation
GDP
Gross Domestic Product; market value of the output of products and services produced within a country; does include contributions of migrant workers and other foreigners employed within a country; excludes profits made by domestic firms made in other countries
PPP
Purchasing Power Parity; relative buying power of each currency; USD often used as standard
Level of living
The material well-being of individuals or families; measured by literacy, infant mortality, life expectancy at birth in years, percent population below the poverty line, unemployment rate, and per capita GDP
Centrally planned economy countries
AKA Communist Regimes; an economic system in which resources are cooperatively or state owned; a classless society in which equal distribution of economic goods is the economic goal
Textile complex
Firms around the world that accomplish textile fiber production and manufacturing, textile manufacturing, apparel manufacturing, retailing, and product consumption
Sourcing
Determines the most cost-efficient vendor of services, materials, production, or finished goods, at a specified quality and service level, for delivery within an identified time frame
Basic goods
Standardized and utilitarian; have infrequent demand for changes in styling
Fashion goods
Individualized and differentiated
Global activities
Include countries beyond the firm’s own regional trading block and may be worldwide; may reflect a different way of thinking
Global products
Those that are the result of manufacturing, and sometimes marketing, operations in several different countries
NAICS
North American Industry Classification System; six-digit system that replaced the SIC system; standardizes the identification of textiles and apparel and other products in a manner consistent with the world market
UPC
Universal Product Code; enables product tracking from factory to consumer
Inferior goods
Consumed out of necessity but not preferred; the amount purchased decreases when income increases
Superior goods
Economic luxuries to which people aspire; the amount purchased increases as income increases but at a faster rate than the income increases
Normal goods
Economic necessities which are regularly consumed; the amount purchased increases as income increases but at a slower rate than the income increase
SIC
Standard Industrial Classification System
RFID
Radio Frequency Identification
Cut-and-sew apparel manufacturing
A manufacturer that cuts the fabric and sews the garments to deliver to the brand’s distribution center
Developed country
A nation whose GDP per capita and other measures of well-being fall well above the world average
Developing country
A nation whose GDP per capita and other measures of well-being fall near or slightly below the world average, based on the benefits of industrial growth
Newly developing country
A nation whose GDP per capita and other measures of well-being fall well blow the world average but that is beginning to be engaged in industrial development, probably related to apparel production
Outward processing
Outsourcing non-origin-conferring operations to a country with a lower wage rate
Non-origin-conferring operations
Processes that do not appear on the label as country of origin
Difference between international trade and global trade
Global trade includes potential interactive participation of many nations, while international trade is strictly the exchange of goods
Tariff
A tax on imports and exports; duty
Quota
Method used to restrict quantities of certain types of goods that can be imported or exported; limit on the quantity of products allowed to enter or exit a country
Outsourcing
Shifting specific operations outside the country in which the origin-conferring operations are performed; the process of acquiring technical services in foreign countries
Globalization of fashion
The production of fashion goods is related to various cultures, economies, and environments
Embargo
The prohibition of the entry of goods into a defined political area; the stoppage of trade until issues can be negotiated
Capitalism
An economic system based on freedom of ownership, production, exchange, acquisition, work, movement, and open competition
Domestic products
Products made in the home country
Distressed goods
Merchandise that is not salable at the intended price; seconds, overruns, samples, last season’s goods, retailer returns, and so on
Protective tariff
Minimizes imports
Examples of a developed country
United States, Great Britain, Australia
Examples of a developing country
El Salvador, Mexico, Turkey
Examples of a newly developing country
Malaysia, Indonesia, Sri Lanka
Vertical integration
Combining firms that perform different stages of the production of the same type of products
Horizontal integration
Joining together under a single management organization, previously competitive enterprises engaged in offering similar goods or services
Difference between vertical and horizontal integration
Vertical involves different steps of production; horizontal is the merger of two similar businesses
Example of vertical intergration
H&M
Example of horizontal integration
Macy’s and Foley’s
Stages of development of the textile complex
Level 1: Textile fiber manufacturing and agricultural production
Level 2: Textiles, textile products, findings, and trims manufacturing
Level 3: Apparel, home furnishing, and industrial product manufacturing
Level 4: Department, mass, specialty, and electronic retailing
Why do you believe that the apparel industry has become the major industry that developing countries establish as the first rung of the industrialization of their country?
Stages of development; women; labor-intensive; simple tasks; low requirements for capital investment to start production; available quantities of low-cost labor
What major reasons caused the apparel industry to grow at a greater rate worldwide?
Advances in technology; communication; China allowing imports and exports
What are the reasons or causes for the change to a global perspective for the textiles and apparel industry?
Forecasting what consumers want to buy; consumer demand; cultural presence; increased incomes; higher education; availability of television and Internet;
How has technology played a role in the shift to a global perspective?
All countries more visible through television and the Internet; news travels quickly; communication
What are the primary concerns regarding the globalization of the textile and apparel industries?
Global economy; safety; laws and regulations; reduction in GDP; negative trade balance (economically vulnerable)
How is it possible for production to increase while employment decreases?
Improvement of equipment and technology
What are some of the factors to consider when locating a country for sourcing textiles and apparel?
Level of living, improvement in economy, abandonment of traditional livelihood, education, low wages, proximity to resources, laws and regulations, travel expenses
How do level of living and standard of living differ?
Level of living is that which is actually experienced, enjoyed, or suffered by an individual during a given period of time. Standard of living is a level that is urgently desired and strived for.
How do income and its various forms impact consumption patterns?
Total income: Gross/personal income.
Disposable income: The amount available to an individual or family.
Discretionary income: The amount available after all current obligations have been covered.
Superior goods, normal goods, inferior goods
How does the specific type of garment or product impact the clothing consumption process?
A person of lower income will spend a higher percentage on clothing.
