Global considerations

Question 1

Define global sourcing of inputs

Answer 1

Where a business looks to use suppliers from different countries. An advantage is that the resources are cheaper.

Question 2

What are the advantages of global sourcing of inputs?

Answer 2

• Cheaper resources

- Increase in production levels (can produce a larger output for less $$$)

Question 3

What are the disadvantages of global sourcing of inputs?

Answer 3

• Transportation costs

- Job loss in industry

Question 4

Define overseas manufacturing

Answer 4

Is the production of a good in a different country. A monitoring process should be implemented by the business to ensure no child labour occurs and working conditions are good.

Question 5

What are the advantages of overseas manufacturing?

Answer 5

• Reduce cost o production

- Easier access to distribute products to many other countries as they are closer together (AU far away).

Question 6

What are the disadvantages of overseas manufacturing?

Answer 6

• Job loss in AU for workers and suppliers

- No control over CSR overseas

Question 7

Define global outsourcing

Answer 7

Is where the business hands over its non-core activities to a business overseas.

Question 8

What are the advantages of global outsourcing?

Answer 8

• Improved quality because of access to expert knowledge and high quality of service.
• Costs can be reduced

Question 9

What are the disadvantages of global outsourcing?

Answer 9

• Management has less control over the production process.

- It may be difficult to maintain quality