Strategic Sourcing and Procurement
Exam Materials
Course Introduction
Strategic Sourcing and Procurement explores the processes and methodologies organizations use to identify, evaluate, and engage suppliers of goods and services in alignment with their strategic objectives. This course covers topics such as supplier evaluation and selection, negotiation strategies, risk management, cost analysis, contract management, and sustainable procurement practices. Through case studies and practical exercises, students will develop skills to optimize sourcing decisions, build effective supplier relationships, and contribute to the overall competitiveness and value creation within an organizations supply chain.
Recommended Textbook
International Logistics Management of International Trade Operations 3rd Edition by David
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Page 2
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Study
Chapter 1: Introduction
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Q1) Which of the following entities was created at the Bretton Woods Conference of 1944?
A) International Monetary Fund
B) World Trade Conference
C) Marshall Plan
D) United Nations
E) None of the above
Answer: A
Q2) Until the 1950s,most of the area rugs in the world were manufactured in Persia (Iran)and Pakistan.Artisans in these countries had developed techniques (dyes and knots)that were unique and that other production areas were not capable of reproducing.These areas enjoyed what Michael Porter would call an "absolute advantage."
A)True
B)False
Answer: False
Q3) In 2007,the United States imported about 1.5 times more goods than it exported.
A)True
B)False
Answer: True
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Chapter 2: International Supply Chain Management
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Sample Questions
Q1) The increased usage of air transport for international trade has had which consequence?
A) decreased shipping costs
B) increased insurance claims
C) increased probability of a company being selected as a supplier, by reducing delivery times
D) increased shipping delays
E) All of the above
Answer: C
Q2) DRP (Distribution Requirements Planning)is a system that allows manufacturers,wholesalers,and retailers of consumer products to manage their inventory "just-in-time:" DPR works as a
A) "draw" system.
B) "push" system.
C) "elastic" system.
D) "pull" system.
E) None of the above
Answer: D
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4
Chapter 3: International Logistics Infrastructure
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Sample Questions
Q1) Because some countries have poor traditional telephone services,companies and consumers have resorted to
A) leap frogging.
B) express package services.
C) satellite telephones.
D) fiber-optic telephones.
E) None of the above
Answer: A
Q2) There is a direct rail link from Southern Europe to Asia where the Orient Express connects directly with the Baghdad Railway in Istanbul.
A)True
B)False
Answer: False
Q3) Ports have been challenged in handling ships with drafts exceeding ____________________ feet.
Answer: 40
Q4) In many countries,access to high-speed highways is limited to those who can pay a ____________________.
Answer: toll
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Chapter 4: Methods of Entry into Foreign Markets
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Sample Questions
Q1) If tariffs on a finished product are higher than tariffs on the parts of the product,the product is said to be in an inverted tariff structure.
A)True
B)False
Q2) While agents,because they are small businesses,are in many countries protected by that country's labor law,distributors,because they tend to be larger and are assumed to be more sophisticated,are covered in most countries by ____________________ law.
Q3) A company has a foreign subsidiary (a wholly-owned foreign enterprise,WOFE)for which it builds a brand new facility.This facility is called a(n)____________________ operation.
Q4) Joint ventures were developed as ways to partner with a politically well-connected company in a foreign country to help prevent things like nationalization of a foreign company by the host government.
A)True
B)False
Q5) The European Union has complained to the World Trade Organization (WTO)that American foreign sales corporations result in a(n)____________________ to exports,which is prohibited by the WTO.
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Chapter 5: International Contracts
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Q1) An arbitration panel is usually made up of ____________________ arbitrators.
Q2) Agreements between an exporter and an agent and agreements between an exporter and a distributor are called distribution contracts.
A)True
B)False
Q3) Contracts normally contain a clause that annuls the contract in the event of an overwhelming unforeseen event like a major storm or fire.This is called an evergreen provision.
A)True
B)False
Q4) In judging whether or not a contract has been breached,the Uniform Commercial Code (UCC)applies the principle of "perfect tender." This means that A) there must be a cash exchange to enforce the contract.
B) the UCC treats the matter the same as the CISG.
C) the parties must refer to their oral agreements, not to what they have written.
D) the goods and their delivery must exactly conform to what was written in the contract.
E) None of the above
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Chapter 6: Terms of Trade or Incoterms
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Q1) Under the FAS Incoterm,in countries where export authorities require a pre-shipment inspection,the ____________________ has to pay for it.
Q2) The DAF Incoterm means "Deliver All Freight."
A)True
B)False
Q3) Under Incoterms EXW,FCA,and FAS,the importer is the party responsible for loading the goods onto the carrier.
A)True
B)False
Q4) The choice of an Incoterm,as well as the choice of the method of payment and of other related transaction alternatives,constitute an exporter's ____________________ service strategy.
Q5) Under Incoterm DEQ,transfer of responsibility for cargo from importer to exporter is at the ship's rail as the cargo is loaded onto the ship
A)True
B)False
Q6) The customer-focused exporter gives the importer a quote in which the importer can determine which ____________________ should govern the transaction.
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Chapter 7: Terms of Payment
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Q1) International factoring
A) is more complicated than domestic factoring.
B) can be used to extend credit beyond what the exporter can normally afford.
C) often involves factoring firms in both the exporting and importing countries.
D) All of the above
E) None of the above
Q2) In a cash-in-advance transaction,all risk is transferred to the ____________________.
Q3) When a letter of credit and the required documents do not match perfectly,it is normally the role of the ____________________ bank to request an amendment to the letter of credit from the bank of the other party.
Q4) SWIFT stands for
A) Southwestern International Fund Transfers.
B) Sales World Institutional Financial Telecommunications.
C) Serving-the-World Institutional Financial Transactions.
D) Society for Worldwide Institutional Transfers.
E) None of the above
Q5) A date draft goes into effect at the time the draft is endorsed (signed).
A)True
B)False
Page 9
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Chapter 8: Currency of Payment (Managing Transaction Risks)
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Sample Questions
Q1) Among the companies that are exposed to risks in currency fluctuation are
A) firms that do not evaluate international currency transaction risks clearly.
B) firms that do not follow a specific policy on currency exchange.
C) firms that have management that is not well-versed in the intricacies of international trade.
D) All of the above
E) None of the above
Q2) In an options market hedge there is the option to sell or purchase certain currencies at a certain exchange rate either on or before a certain date.The agreed-upon exchange rate is called the
A) international leverage.
B) trade dimension.
C) leveraging currency.
D) transaction exposure.
E) None of the above
Q3) An exporter writing a quote for a customer located in a developed country can expect that several of his competitors will quote in the ____________________ currency.
Q4) The euro was first created as an artificial ____________________.
Page 10
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Chapter 9: International Commercial Documents
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Q1) A careful preparation of all of the documents by the exporter helps the importer tremendously when it is time to clear Customs.
A)True
B)False
Q2) Incoterms determine if a Certificate of Insurance is
A) required on the air waybill.
B) the responsibility of the exporter or importer.
C) a receipt for the goods.
D) a certificate of title.
E) part of the packing list.
Q3) EDI is
A) Electronic Data Interchange.
B) an electronic exchange of documents from computer to computer.
C) based upon a legal agreement between sender and recipient.
D) All of the above
E) None of the above
Q4) A document sometimes requested by the importer that is signed by an independent third party attesting to authenticity and accuracy of a shipment is a Certificate of
Q5) The United States requires a(n)____________________ Export Declaration.
Page 11
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Chapter 10: International Insurance
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Sample Questions
Q1) Most of the ships that sink each year
A) are older ships.
B) are bulk ships.
C) are ships flying third world countries' flags.
D) All of the above
E) None of the above
Q2) The concept of general average is exclusively used in marine insurance.
A)True
B)False
Q3) "Warehouse-to-Warehouse" coverage is an extension to the traditional
A) All Risks policy.
B) With Average policy.
C) Free of Particular Average policy.
D) All of the above
E) None of the above
Q4) A P&I club is a mutual form of insurance.
A)True
B)False
Q5) Protection and ____________________ is a form of insurance for a ship owner against liability to other parties when a ship sinks or is damaged.
Page 12
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Chapter 11: International Ocean Transportation
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Q1) According to the Jones Act,United States' cabotage prohibits the use of U.S.-flagged ships.
A)True B)False
Q2) The American Convention for the Unification of Certain Rules of Law Relating to Bills of Lading is known as the Hague Rules.
A)True B)False
Q3) ____________________ ships do not operate on a regular schedule but travel wherever the company using the vessel wants the cargo delivered.
Q4) Net [registered] tonnage is gross registered tonnage minus volume occupied by the engine room,the crew,and other space necessary for the good operation of the ship. A)True B)False
Q5) All cargo in trades supported by the Ex-Im Bank must be shipped through European-flagged ships.
A)True B)False
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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) What distinguishes a passenger aircraft from an airfreighter is the fact that only the airfreighter carries freight on the main deck.
A)True
B)False
Q3) The largest airfreight company in the world is ____________________.
Q4) The largest cargo airport in the world is at ____________________.
Q5) International cargo services on passenger airplanes are somewhat unreliable because passenger airlines often ____________________ freight.
Q6) The largest cargo airport in the world is Miami,Florida. A)True
B)False
Q7) Airfreighters are equipped with a roller deck. A)True
B)False
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Chapter 13: International Land and Multi-Modal Transportation
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Q1) Cargo of exceptional size and/or weight is called ____________________.
Q2) 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
Q3) Although there are some standardization attempts,most air freight ____________________ are designed to fit a specific aircraft.
Q4) Like the United States,Australia has a lot of railroad capability to carry truck trailers across the country.
A)True
B)False
Q5) Malcom McLean devised the container system and implemented it in
A) 1966.
B) 1956.
C) 1946.
D) 1976.
E) None of the above
Q6) River barges mostly carry ____________________ cargo. Page 15
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Chapter 14: Packaging for Export
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Q1) Light leakage in a container could indicate a risk of water infiltration.
A)True
B)False
Q2) FCL cargo stands for
A) Freight Carried Logistically.
B) First-Carry List.
C) Figero Citeria Logistica.
D) Federal Criteria Lessened.
E) None of the above
Q3) Both crates and boxes should always be reinforced with ____________________ strapping and ____________________ bands.
Q4) The strongest type of shipping crates are
A) enclosed in empty crates about 3 percent larger.
B) constructed with three-way corners.
C) constructed of woven polymer fibers such as polyethylene or polypropylene.
D) All of the above
E) None of the above
Q5) About 43 percent of all claims made by shippers to their insurance companies are for ____________________ of goods in transit.
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Chapter 15: International Logistics Security
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Q1) Type I errors (identifying a safe shipment incorrectly as dangerous)is less dangerous than Type II errors (identifying a dangerous shipment incorrectly as safe).
A)True
B)False
Q2) A security policy that emphasizes 100-percent inspection is the best method for detecting explosives.
A)True
B)False
Q3) The policy of a one-hundred-percent inspection is considered flawed because A) the costs are staggering.
B) the amount of room it requires is greater than what is normally available.
C) the personnel needed is very large.
D) it is ineffective.
E) All of the above
Q4) Tamper-resistant seals are preferable over traditional seals.
A)True
B)False
Q5) The ____________________ initiative coordinates the efforts of Customs authorities worldwide in their effort to combat terrorism.
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Chapter 16: Customs Clearance
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Q1) Customs brokers are usually compensated on
A) a percentage of the tariff.
B) a percentage of the added value of the goods.
C) a schedule set by the United Nations.
D) a schedule set by the World Trade Organization.
E) None of the above
Q2) The Harmonized System of classification is used to classify both exports and imports.
A)True
B)False
Q3) An "assist"
A) is an item the importer provided to the exporter to produce the good (such as a mold or die used in manufacturing the product).
B) is illegal.
C) changes the invoice value of the imported goods.
D) All of the above
E) None of the above
Q4) The country of origin of a product is the country in which it acquired its most substantial ____________________.
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Chapter 17: Using International Logistics for Strategic Advantage
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Q1) The language which is generally considered to be the easiest to learn is ____________________.
1.
Q2) In a transaction conducted in the exporter's currency,it is the importer that carries the currency exchange rate risk.
A)True
B)False
Q3) International English was designed to reduce communication errors between native speakers of English and people who speak English as a second language.
A)True
B)False
Q4) In many countries,work and ____________________ rarely intersect.In other countries,they are closely tied to one another.
Q5) A native speaker of English can use computer-translation software to determine whether his English will be understood by a foreign correspondent,by translating into a foreign language and then ____________________ into English.
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