CPM Global Sourcing and International Procurement 3

Question 1

When negotiating with suppliers from high-context cultures (such as Japan or China), a purchasing manager should recognize that:

Accepted Answer

Written contracts are less important and relationships drive business decisions

Answer

Price is the only variable that matters in negotiations

Answer

Decisions are typically made quickly and individually

Answer

Direct refusals and disagreements are common and expected

Question 2

Which of the following best describes 'nearshoring' as a global sourcing strategy?

Accepted Answer

Relocating procurement to geographically close countries to reduce lead times and risks

Answer

Sourcing goods from the country with the absolute lowest labor costs

Answer

Bringing all manufacturing back to the home country

Answer

Sourcing from suppliers located in free trade zones

Question 3

A Free Trade Zone (FTZ) in international procurement primarily offers which advantage to importers?

Accepted Answer

The ability to defer, reduce, or eliminate customs duties on goods stored, manipulated, or manufactured there

Answer

Guaranteed lowest prices from suppliers located within the zone

Answer

Exemption from all product quality and safety regulations

Answer

Priority customs clearance over standard import shipments

Question 4

Under the Foreign Corrupt Practices Act (FCPA), a U.S. company's purchasing department must ensure that:

Accepted Answer

No payments are made to foreign government officials to obtain or retain business

Answer

All international contracts are written in English

Answer

Supplier invoices from foreign countries are paid within 30 days

Answer

All international suppliers carry a minimum level of liability insurance

Question 5

When selecting an international freight forwarder, a purchasing manager should primarily consider the forwarder's ability to:

Accepted Answer

Manage documentation, customs compliance, and carrier negotiations for international shipments

Answer

Manufacture goods locally to reduce shipping distances

Answer

Provide financing for the purchase of imported goods

Answer

Translate supplier contracts into the buyer's native language

Question 6

Global sourcing can expose a company to supply chain disruptions not typically found in domestic sourcing. Which risk mitigation strategy specifically addresses geographic concentration risk?

Accepted Answer

Diversifying the supplier base across multiple countries or regions

Answer

Negotiating longer contract terms with a single global supplier

Answer

Increasing safety stock levels at domestic distribution centers only

Answer

Requiring all suppliers to use the same shipping carrier

Question 7

Which document in international trade describes the goods being shipped, including quantity, weight, description, and value, and serves as the basis for customs valuation?

Accepted Answer

Commercial Invoice

Answer

Bill of Lading

Answer

Packing List

Answer

Certificate of Conformance