Chapter 3

Question	Answer
1. Globalization is not considered to be one of the external factors driving change in logistics.	F
2. The third era of globalization is said to have begun around the year 2000. The significant characteristic of this era is that it is being powered by individuals and smaller organizations in contrast to the countries of the first era and the large companies of the second era.	T
3. The supply chain should manage four important flows, namely, materials and products, information, financials, and demand.	T
4. Operating globally has become harder to accomplish for individuals and small companies.	F
5. The terms of a demise charter transfers full control of the chartered vessel to the charterer.	T
6. Customs Trade Partnership Against Terrorism (C-TPAT) is a mandatory program in which importers must participate.	F
7. The North American Free Trade Agreement has removed all trade barriers between the U.S., Canada, and Mexico.	F
8. A maquiladora plant can be located anywhere in South America.	F
9. Ocean transportation offsets slower service with lower rates than other modes.	T
10. A firm using air transportation cannot use the same packaging for international shipping as for domestic shipping because many cargo aircraft are not pressurized.	F
11. A Foreign Freight Forwarder is unregulated by the government.	F
12. Export Trading Companies and Export Management Companies are essentially the same.	F
13. An importer can store goods in a bonded warehouse for up to three years without paying duty.	T
14. Soft issues such as social and cultural concerns should not present a challenge for supply chain managers, whose role is to focus on the physical side of supply chain execution.	F
15. Globalization was initially driven by countries a. seeking new territories. b. outside the U.S. seeking to establish plants in the U.S. c. seeking materials and goods not available in their own land. d. sponsoring trading missions.	c. seeking materials and goods not available in their own land.
16. A critical ingredient for the Third Era of globalization is: a. the global emphasis on tailoring products and marketing strategies to meet perceived local needs b. technological advances, especially in information technology and communications c. the global emphasis on profits and efficiency d. the global emphasis on the marketing mix and marketing functions	b. technological advances, especially in information technology and communications
17. The Supply Chain should a. manage all aspects of transportation, selecting the least cost when possible. b. seek to maximize profits. c. use the same techniques internationally that it uses domestically. d. manage materials and products, information, financials, and demand.	d. manage materials and products, information, financials, and demand.
18. In his book “The Wealth of Nations”, Adam Smith stated that economies and companies could improve their wealth by a. allowing specialization of tasks. b. ensuring that logistics is used to gain advantage in the marketplace. c. becoming multi-national. d. moving production off shore.	a. allowing specialization of tasks.
19. A demand-driven system is also known as a. a supply chain. b. a pull system. c. a marketing system. d. a multi-echelon system.	b. a pull system.
20. A maquiladora plant is a. a new type of flower. b. an entity created under NAFTA c. a U.S. plant performing manufacturing, processing, or assembly activity in Mexico. d. a factory owned by the Maquiladora Corporation.	c. a U.S. plant performing manufacturing, processing, or assembly activity in Mexico.
21. Focused production is a. a strategic decision to make only what the market desires. b. used by those firms not sure of the market demands. c. a strategy in which a given plant produces one or two items of the company’s total product line. d.` a trend in the electronics industry with manufacturing in China.	c. a strategy in which a given plant produces one or two items of the company’s total product line.
22. Which are the major modes of international transportation? a. water and air b. water and rail c. rail and motor d. rail and air	a. water and air
23. Which is a major category of ocean shipping? a. passenger travel b. common carriers c. exempt carriers d. charter vessels	d. charter vessels
24. Which category of ocean shipping offers set schedules over specified sea routes? a. liner service b. charter vessels c. private vessels d. demise charter vessels	a. liner service
25. Which is the main advantage of international air transport? a. freight rates b. flexibility c. transit times d. accessibility	c. transit times
26. Which condition must be present before motor carriers and rail carriers can be used for international shipments? a. shipments must be in volume and in bulk b. the shipment must be between adjacent countries c. no customs barriers can be imposed d the shipment cannot pass through adjacent countries	b. the shipment must be between adjacent countries
27. These are designated by the U.S. secretary of the treasury for the purpose of storing, repacking, sorting or cleaning imported merchandise entered for warehousing without paying import duties while the goods are in storage. a. Bonded warehouses b. Hold-on-dock storage c. In-transit storage areas d. Transit sheds	a. Bonded warehouses
28. Gemini products wishes to enter foreign markets but lacks the resources to do so. They evaluate their alternatives and approach Overseas Traders, LLC, a company that specializes in the foreign distribution of products of the type which Gemini manufacturers. Overseas purchases $50,000 of Gemini's products for sale on the international market. Overseas is which type of global logistics channel intermediary? a. NVOCC b. export packer c. export trading company d. customs house broker	c. export trading company
29. The global logistics channel intermediary that supervises the movement of goods through customs and ensures that the documentation accompanying a shipment is complete and accurate is known as a. a foreign freight forwarder. b. an export packer. c. a customs house broker. d. a foreign trade specialist.	c. a customs house broker.
30. Which type of global logistics channel intermediary enables goods to move through customs more easily by consolidating small shipments into more economical sizes? a. customs house broker b. NVOCC c. export trader d. foreign freight forwarder	d. foreign freight forwarder
31. Goods can be stored in a bonded warehouse a. for up to 3 years. b. until next year. c. Indefinitely. d. until the next shipment of the same product arrives.	a. for up to 3 years.
32. The biggest and best known example of a regional trade agreement (RTA) is the: a. World Trade Organization (WTO) b. General Agreement on Tariffs and Trade (GATT) c. European Union (EU) d. Customs Trade Partnership Against Terrorism (C-TPAT)	c. European Union (EU)
33. America’s ports are a key component of its global commerce. U.S. ports also play a vital role for the cruise industry. Which of these is not one of the top three departure ports for the cruise industry? a. Port Canaveral, Florida b. Cape Liberty, New Jersey c. Miami, Florida d. Ft. Lauderdale, Florida	b. Cape Liberty, New Jersey
34. As market forces continue to exert pressure on companies to improve profitability, the quest for lower-cost manufacturing has been a factor in the relocation of manufacturing from Mexico to ________ ? a. South America b. Asia c. Russia d. Canada	b. Asia

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