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Global Trade > Final Exam > Flashcards

Final Exam Flashcards

1
Q

What are the three major elements of a sourcing strategy?

A

Product/marketing strategy, a sourcing strategy to obtain the product and to meet market needs, financial plan to facilitate the two other elements of the strategy

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2
Q

Sourcing

A

Activities performed to acquire materials, finished goods, or both; selecting a country or vendor to do business with; the basic process of procuring merchandise to meet an organization’s marketing requirements

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3
Q

Synonyms of sourcing

A

Outsourcing, offshoring, or offshore outsourcing

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4
Q

Why is sourcing needed? (3)

A

Technological advances; costs of labor, materials, and overhead; rapid growth of imports

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5
Q

What factors are used to evaluate sourcing options? (6)

A

Product cost (the value of one currency relative to another is key), quality desired, control over entire process desired, investment requirements in facility and overhead, response capabilities relative to time, overall risks involved

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6
Q

The Big Mac Index

A

Used to compare the international market; based on a product that is produced in about 120 countries; indicates overvalued/devalued currencies; explores relative buying power of multiple currencies

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7
Q

CMT sourcing

A

Cut-Make-Trim; sourcing company bears all costs except production; product development, fabric sourcing, delivery to producer, duties, and transportation costs

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8
Q

Full Package sourcing

A

Production contractor finances most of the manufacturing processes including product development and materials

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9
Q

When selecting products to source what types of considerations about each product should be made? (10)

A

Labor content, product complexity, line diversity, length of production runs, availability and cost of materials and trim, relative predictability of production scheduling, duty, quotas, bulk of the garment (size and weight), technology required

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10
Q

Complete Sourcing Options by Comparison chart

A

See PDF

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11
Q

What customs regulations must you comply with if you are importing textile and apparel products into the U.S.? (6)

A

Quota must be available, labeling must show COO, applicable products must show certification (CPSC/flammability), applicable products must meet wool product labeling, TFPIA compliance for labeling, care instructions

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12
Q

What are some of the reasons or “hidden costs” to retailers that might offset the advantages of direct importing? (9)

A

Lower inventory turns at retail; interest costs of money tied up longer/currency fluctuations; inflexible OTB positions; inability to reorder or cancel orders; long lead times; administrative or procurement costs increased; higher markdowns; delivery delays and uncertainties; absence of cooperative advertising funds or promotional packages

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13
Q

Government subsidy

A

Includes grants and low interest loans, finance expansion and modernization to cover operating losses; may be granted to unproductive producers if industry is considered important to economic growth

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14
Q

Capitalism

A

Encourages private individual to create their own business

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15
Q

Adam Smith

A

Wrote “Wealth of Nations,” British, proposed absolute advantage

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16
Q

Absolute advantage

A

Adam Smith; if one country does something better, use the product from that country; each country should do what they do best; international division of labor; country can produce more; higher quality; able to sell at a lower price

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17
Q

Comparative advantage

A

David Riccardo; value of any commodity is determined by labor cost

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18
Q

Competitive advantage

A

Michael Corder; enables a firm to beat its competition in the world marketplace; example: Toyota and its factories in the US

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19
Q

Free trade agreement

A

Removal of tariffs

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20
Q

Customs union

A

Removal of tariffs; all set a concise, external, common tariff for any country that is not part of the agreement

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21
Q

Common market

A

Removal of tariffs; all set a concise, external, common tariff for any country that is not part of the agreement; eliminate restrictions on resources used to produce goods; people and resources can move back and forth freely

22
Q

Economic union

A

Removal of tariffs; all set a concise, external, common tariff for any country that is not part of the agreement; eliminate restrictions on resources used to produce goods; people and resources can move back and forth freely; harmonized national economic policy

23
Q

Complete economic integration

A

Removal of tariffs; all set a concise, external, common tariff for any country that is not part of the agreement; eliminate restrictions on resources used to produce goods; people and resources can move back and forth freely; harmonized national economic policy; standard monetary system

24
Q

Mercantilism

A

Maximize exports

25
Q

Sweat shop

A

Labor until you sweat

26
Q

Triangle Shirtwaist Factory fire

A

1911; claimed over 100 lives; exit doors locked; many women jumped

27
Q

Shirtwaist

A

Women’s dress that looks like a shirt

28
Q

Wagner Labor Act

A

Gave unions the right to organize; passed by Roosevelt before the New Deal

29
Q

Garmento

A

Man in the garment business

30
Q

Middle market

A

Middle class; heart of the business

31
Q

Schmatta center

A

Garment district (34th to 40th, 7th to Broadway to 8th)

32
Q

What started the exportation of jobs?

A

JFK allowed 4% of garments to be manufactured outside of the US

33
Q

Schmatta

A

Yiddish for rags or tattered garments

34
Q

Shabby

A

Flimsy, thin, inferior fabric

35
Q

What percentage of clothing sold in the US is made in the US as of 2011?

A

5%

36
Q

9802/9802A

A

Written in import/export laws in Customs; goes to country as unfinished goods, comes back finished, must return to the domestic market

37
Q

AFTA

A

ASEAN Free Trade Area

38
Q

ASEAN

A

Association of South East Asian Nations

39
Q

APEC

A

Asia-Pacific Economic Cooperation

40
Q

COMESA

A

Common Market for Eastern and Southern Africa

41
Q

CACM

A

Central American Common Market

42
Q

CAFTA

A

Central America Free Trade Agreement

43
Q

CARICOM

A

Caribbean Community

44
Q

EFTA

A

European Free Trade Association

45
Q

EU

A

European Union

46
Q

GCC

A

Gulf Cooperation Council

47
Q

MERCOSUR

A

Southern Common Market Agreement

48
Q

SADC

A

South African Development Community

49
Q

SACU

A

Southern African Customs Union

50
Q

SAFTA

A

South Asian Free Trade Area

Global Trade (3 decks)

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