Global Operations Management
Chapter Exam Questions
Course Introduction
Global Operations Management explores the strategic and tactical aspects of managing operations in a global context. This course examines the complexities of coordinating production, supply chains, and logistics across international borders, considering cultural, economic, and political differences. Students will analyze global sourcing, network design, risk management, and sustainable practices while utilizing quantitative and qualitative tools for decision-making. The course prepares students to address challenges in delivering products and services efficiently and effectively in a competitive global marketplace.
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International Logistics Management of International Trade Operations 3rd Edition by David
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Chapter 1: Introduction
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Q1) A country often enjoys a comparative advantage because of the abundance of a particular production factor (land,labor,capital,or entrepreneurship)within its borders.
A)True
B)False
Answer: True
Q2) Most trade today is more likely to be explained by the Theory of Comparative Advantage than by the Theory of Absolute Advantage.
A)True
B)False
Answer: True
Q3) The International Product Life Cycle Theory explains why there are no televisions manufactured in Great Britain and the United States,although that technology was invented in those countries.
A)True
B)False
Answer: True
Q4) The Theory of Absolute Advantage was first coined by ____________________. Answer: Adam Smith
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Chapter 2: International Supply Chain Management
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Q1) The costs of domestic logistics (transportation and inventory)represent approximately ____________________ of the GDP of the United States.
Answer: 10 percent
Q2) The cost of air cargo shipments decreased after the deregulation of the 1980s.
A)True
B)False
Answer: True
Q3) The globalization of markets is a recent phenomenon.
A)True
B)False
Answer: False
Q4) In the 1980s,companies started to manage their inventories much more closely than they had in the 1960s and 1970s.This was due to an increase in A) interest rates.
B) the value of inventories in general.
C) the value of the goods held in inventory.
D) the creation of just-in-time inventory management systems.
E) None of the above.
Answer: A
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Chapter 3: International Logistics Infrastructure
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Q1) Ports have been challenged in handling ships with drafts exceeding ____________________ feet.
Answer: 40
Q2) A country's court system could be considered to be part of its infrastructure.
A)True
B)False
Answer: True
Q3) Because work in modern ports goes so fast,there is no need for warehousing space.
A)True
B)False
Answer: False
Q4) The Ports of the World booklet provides a thorough directory of public warehouses located throughout the world.
A)True
B)False
Answer: False
Q5) The tunnel between France and Great Britain is called the ____________________.
Answer: Chunnel
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Chapter 4: Methods of Entry into Foreign Markets
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Q1) The customs status of a maquiladora is similar to that of
A) a foreign trade zone located only in the United States.
B) a foreign trade zone located only in Mexico.
C) a Customs office.
D) what is outlined in the Foreign Corrupt Practices Act.
E) None of the above
Q2) An exporter invests in a facility abroad,but finds one or more partners with which to share the costs of the venture and it results in creation of a new corporation in a foreign country.This is an example of a(n)____________________ venture.
Q3) _____ is not truly a method of entry into a country for an exporter.
A) Active exporting
B) A marketing subsidiary
C) Contract manufacturing
D) A wholly-owned subsidiary
E) Franchising
Q4) A distributor takes much less risk in its relationship with an exporter than does an agent and experiences much lower costs.
A)True
B)False
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Chapter 5: International Contracts
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Q1) Whether or not a sales contract is international is always self-evident.
A)True
B)False
Q2) The "facilities and activities" clause of a contract between an exporter and an agent/distributor spells out what kind of docking arrangements will be made when the goods arrive by ship into the agent/distributor's country.
A)True
B)False
Q3) A ____________________ notice spells out how many days the exporter must give the agent/distributor before their termination becomes effective.
Q4) When an international distribution contract between an exporter and an agent/distributor is terminated for "just cause," in most cases the termination is made by the
A) agent/distributor.
B) government of the agent/distributor.
C) exporter.
D) government of the exporter.
E) None of the above
Q5) An arbitration panel is usually made up of ____________________ arbitrators.
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Chapter 6: Terms of Trade or Incoterms
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Q1) Under the CFR Incoterm,if the pre-paid contract of carriage does not include the unloading of the ship,then the ____________________ must pay for it.
Q2) In a quote which includes multiple Incoterms,so that the customer can choose,the Incoterm that has the highest invoiced amount is
A) EXW.
B) FCA.
C) DDP.
D) CIP.
E) None of the above
Q3) Electronic Data Interchange (EDI)has changed what issue in Incoterms?
A) who pays for insurance
B) who pays for import clearance
C) documentation of delivery
D) All of the above.
E) None of the above.
Q4) As far as the importer is concerned,under the DDP Incoterm,receiving an international shipment is no different that receiving a(n)_____________________ shipment.
Q5) The Incoterm DDU means "Delivered _____________________ Unpaid."
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Chapter 7: Terms of Payment
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Q1) Because of the risks associated with open-account transactions,when an exporter is forced for competitive reasons to offer an open account,the exporter should acquire credit ____________________ on those sales.
Q2) Since a draft (or a bill of exchange)is a legal document in the importing country,the courts in the importing country would consider non-payment by an importer as a domestic issue.
A)True
B)False
Q3) A payment guarantee is the most commonly used type of guarantee and is used to ensure that the contractor finishes the project.
A)True
B)False
Q4) In a letter of credit,the most important aspect is
A) the creditworthiness of the importer.
B) the documentation of the transaction.
C) the creditworthiness of the exporter.
D) the promise of eventually changing to an open account.
E) None of the above
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Chapter 8: Currency of Payment (Managing Transaction
Risks)
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Q1) A characteristic of options hedging is that options are commonly traded for many different currencies.
A)True
B)False
Q2) International exchange rates began to float
A) in 1971.
B) at the end of the gold standard.
C) and it changed the role of the International Monetary Fund.
D) All of the above
E) None of the above
Q3) Historical exchange rate data can easily be obtained from A) the Friday Wall Street Journal.
B) the Bank of Canada.
C) the Sunday New York Times.
D) the January edition of Forbes.
E) None of the above
Q4) If an exporter chooses to quote in his country's currency,or quotes in the importer's country currency and hedges with a money market hedge,it is to minimize his ____________________ risks.
Q5) The euro was first created as an artificial ____________________.
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Chapter 9: International Commercial Documents
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Q1) End-Use Certificates
A) are provided by the governments of the exporting country.
B) certify that the product is going to be used for a legitimate purpose.
C) must be signed by the exporter's chamber of commerce.
D) All of the above
E) None of the above.
Q2) The United States export policy is mostly concerned about
A) keeping some military technologies away from some countries.
B) stopping exports of non-essential items to countries that cannot afford them.
C) regulating exports to countries that have strong import regulations.
D) All of the above
E) None of the above
Q3) A uniform bill of lading is not used for inland transportation.
A)True
B)False
Q4) A Certificate of Origin must be signed by the importer's chamber of commerce.
A)True
B)False
Q5) An express authorization by a given country's government to export a specific product before it is shipped is called a(n)____________________ license.
Page 11
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Chapter 10: International Insurance
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Q1) More companies are selling insurance on an "open-account" basis because
A) countries are providing more export subsidies.
B) the nationalization of Compagnie Francaise d'Assurance pour le Commerce Exterieur has allowed more policies to be issued.
C) the World Trade Organization is now encouraging the practice.
D) All of the above
E) None of the above
Q2) At Lloyd's,the individuals assuming (insuring)risks have
A) unlimited liability.
B) limited liability.
C) limited liability only in the United Kingdom.
D) unlimited liability only in the United Kingdom.
E) None of the above
Q3) Airfreight insurance policies
A) are more complicated than ocean marine policies.
B) are written as "All Risks" policies.
C) have none of the traditional exclusions of ocean marine policies.
D) All of the above
E) None of the above
Q4) Most cargo sent by air has ____________________ value.
Page 12
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Chapter 11: International Ocean Transportation
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Q1) ____________________ ships travel on a regular voyage,following a pre-established schedule,and with determined ports of call.
Q2) LASH ships were initially designed to carry automobiles.
A)True
B)False
Q3) LNG and LPG ships
A) are obsolete.
B) cannot compete with container ships.
C) often operate on long-term contracts.
D) All of the above
E) None of the above
Q4) Containerization is increasing in international shipping. A)True B)False
Q5) The Ocean Shipping Reform Act allows private,confidential ____________________ between shippers and shipping lines,where traditional liability constraints are replaced by negotiated ones.
Q6) LASH ships cannot function well in ports that have little lifting equipment. A)True B)False
Page 13
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Chapter 12: International Air Transportation
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Q1) The Customs-Trade Partnership Against Terrorism (C-TPAT)is a program developed by the World Customs Organization for the prevention of terrorism acts against airfreighters.
A)True
B)False
Q2) Most airfreight on passenger planes is not palletized but is ____________________.
Q3) The international airfreight business is regulated by
A) the Federal Aviation Administration.
B) the Civil Aeronautics Board.
C) the Civil Air Patrol.
D) Aeroflot.
E) None of the above
Q4) Even though countries may agree to "open-skies," the number of flights may be limited by the number of airport ____________________.
Q5) UPS invented "time defined" deliveries in 1981.
A)True
B)False
Q6) The largest cargo airport in the world is at ____________________.
Q7) The largest airfreight company in the world is ____________________.
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Chapter 13: International Land and Multi-Modal Transportation
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Q1) Not including intermodal shipments,the three main traditional areas of the U.S.railroad freight business have been in the areas of
A) high-end electronics, cut flowers, and time-sensitive parcels.
B) packaged consumer goods, computers, and gasoline.
C) bulk freight, break-bulk freight in boxcars, and automobiles.
D) mobile homes, fast mail, and gravel.
E) None of the above
Q2) Extended length containers are designed to hold cargo that does not fit in a 40-foot container.
A)True
B)False
Q3) Unlike the United States,European railroads focus more on ____________________ traffic than freight.
Q4) In the European Union,trucking is often delayed by A) border controls.
B) grossly overloaded trucks.
C) social protests.
D) All of the above
E) None of the above
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Chapter 14: Packaging for Export
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Q1) Both crates and boxes should always be reinforced with ____________________ strapping and ____________________ bands.
Q2) When goods needing refrigeration travel by ocean,they usually travel in a refrigerated container,a specialized contained also nicknamed a ____________________.
Q3) Shipping bags are very good at withstanding numerous manipulations.
A)True
B)False
Q4) To protect against condensation damage inside a container,the container's interior floor and,ideally,its interior sides should be made of ____________________.
Q5) Characteristic(s)of steel drums is/are
A) they can be used for dry or wet cargo.
B) they are fairly resilient containers.
C) they can withstand a good amount of abuse.
D) All of the above
E) None of the above
Q6) Most in-transit thefts involve people who are ____________________.
Q7) To keep cargo from shifting,some shippers use inflatable ____________________.
Page 16
Q8) Placing a truck trailer on a railroad car is called ____________________.
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Chapter 15: International Logistics Security
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Q1) In order to protect their shipments while they are in transit,companies implement a different set of measures; they make sure that all cargo containers are ____________________ before they leave any facility
Q2) Countries located outside of North America and Europe do not feel threatened by terrorism and therefore have not cooperated with international security measures.
A)True
B)False
Q3) The United States and the European Union approach security issues in more or less the same way.
A)True
B)False
Q4) The primary role of the World Customs Organization has traditionally been A) developing security procedures.
B) the simplification and harmonization of Customs' procedures.
C) negotiating free trade agreements.
D) eliminating customs duties.
E) None of the above
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Chapter 16: Customs Clearance
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Q1) Duty is usually based upon
A) tariff, border traffic taxes, and non-tariff barriers.
B) value-added taxation, absolute quota, and patriotism campaigns.
C) pre-shipment inspections and Customs bonds.
D) product classification, valuation, and origin.
E) None of the above
Q2) A tariff-rate quota
A) places a two-tiered tariff rate on a specific category of products.
B) keeps the tariff low until the quota is reached.
C) raises the tariff after the quota is reached.
D) All of the above
E) None of the above
Q3) Documentation designed to indicate what country a product initially came from is contained in the
A) commercial invoice.
B) Certificate of Origin.
C) surety bond.
D) entry form.
E) None of the above
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Chapter 17: Using International Logistics for Strategic Advantage
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Q1) When unsure about the proper way to address a new acquaintance abroad,it is best to err on the side of ____________________ rather than casual communication.
Q2) The metric system has pre-set prefixes for multiples of a unit.Which of the following prefixes corresponds to fractions of a unit?
A) milli, centi and deci
B) deka, hecto and kilo
C) quartile, quintile, and decile
D) giga, mega, and kilo
E) None of the above
Q3) Special English is used for written communications,just as International English is.
A)True
B)False
Q4) The sentence "We were all fired up about you're proposal" is written in such a simple way that it is clearly understandable to someone who only has a limited understanding of English as a second language.
A)True
B)False
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