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1. BUS 230 Week 10 Quiz – Strayer
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Chapter 14 and 15
Global Supply Management
93. When there is a large number of common requirements across facilities or
business units, and the supply base is dispersed geographically, an appropriate global
sourcing structure is:
a. a global commodity management organization.
b. regional purchasing offices that manage the region’s spend for every
commodity.
c. a centralized international purchasing office equidistant from key suppliers.
d. a centrally managed global sourcing office located in the corporate
headquarters.
e. a decentralized structure where purchasing managers are at each facility.
94. A foreign trade zone (FTZ) in the U. S.:
1. facilitates rapid calculation of import duties.
2. facilitates rapid calculation and payment of import duties.
3. creates and maintains jobs in the United States that might have gone offshore.
4. is completely different in purpose from a maquiladora in Mexico.
a. must use only goods made in the U. S. according to the Buy America Act.
95. When sourcing internationally:
a. the buyer should learn about the culture, customs, norms, taboos, and history
of the supplier’s country.
b. the need for personal space is generally the same in most regions of the world.
c. the global availability and use of email, fax, and phone has largely eliminated
communication barriers.
d. differing cultural and social norms will have little impact since most
businesspeople are accustomed to working with North Americans.
1. the buyer should immediately establish an informal first-name basis with the
supplier’s representatives.
96. The United Nations Convention for the International Sale of Goods (CISG):
1. is automatically applied if both nations have adopted the CISG, unless another
body of law is agreed upon in the contract.
2. is automatically applied if both nations have adopted the CISG, and there can
be no exceptions.
3. replaces the UCC as the worldwide body of law governing international trade.

2. 4. should always be the preference for a buyer from the United States.
5. always puts the United States buyer at an advantage.
97. Which of the following would encourage countertrade?
1. excess foreign exchange.
2. readily available credit.
3. a strong base of suppliers.
4. the need to develop export markets for new products.
5. a well-developed domestic economy.
98. In international buying, the entity that makes a contract with the buyer and then
buys the product in its name from the foreign supplier, takes title, delivers to the place
agreed on with the buyer, and then bills the buyer for the agreed-on price, is a(n):
a. import broker.
b. sales agent.
c. import merchant.
d. trading company.
e. foreign import agent.
99. The Foreign Corrupt Practices Act (FCPA):
a. allows payment to facilitate the performance of normal duties.
b. attempts to persuade other nations to adopt U.S. rules regarding payments to
officials.
c. allows U.S. firms to prosecute foreign nationals on bribery charges.
d. allows U.S. firms to make payments to facilitate normal duties and to make
payments to obtain special advantages.
e. allows foreign nationals to offer payments to U.S. government officials to
expedite trade agreements.
100. When comparing the total cost of ownership from an international supplier to
that of a domestic supplier, the international supplier’s:
a. lower labor costs are easily eroded by additional shipping and insurance costs.
b. price will be higher if the U.S. dollar is strengthening on the exchange rate.
c. lower labor costs offset the high cost of inefficient equipment and processes.
d. lower labor rates must be considered in the context of productivity and quality.
e. prices are carefully controlled by the U.S. government to prevent dumping.
101. The most-cited reason for international trade is:
1. better quality.
2. better overall value.
3. more advanced technology.
4. lower total costs.
5. lower price.
102. When dealing with an international supplier, a knowledgeable buyer:

3. a. normally will attempt to negotiate a cost-plus-incentive-fee contract.
b. will attempt to price in Euro Dollars.
c. will normally price in the currency of the seller's country.
d. will always state the price in U.S. dollars.
e. may decide to deal in international currency options.
True and False
1. The NAFTA, the EU, ASEAN and the WTO are all examples of Free Trade
Agreements which were designed to facilitate trade between and among member
countries.
2. The governing convention on shipping terms and responsibilities involved in
international transportation is called ITAPS (International Transport and Payment
Specifications.)
3. Even though the economy of Mexico relies heavily on the jobs generated by
maquiladoras, the government of Mexico has not set wage rates equal to those of
India and China.
4. Countertrade historically has been very uncommon in the sale by U.S. firms of
armaments to other nations, but very common in civilian procurement projects.
5. When one condition of the countertrade agreement is that government and/or
military-related exports be purchased, this is a swap trade arrangement.
6. The primary reasons for using a foreign trade zone (FTZ) are (1) to avoid,
postpone, or reduce duties on imported goods, and (2) to create economic benefits for
the local community through job creation.
7. A temporary importation bond (TIB) allows certain classes of merchandise, to be
imported into the U. S. with the net effect that no duty is paid on the merchandise,
provided it is reexported.
8. Three approaches to global sourcing are to establish (1) global purchasing offices,
(2) International Commodity Organizations (ICOs), or (3) Regional Purchasing
Offices (RPOs).
9. It is rare for international trade disputes to be settled through international
arbitration partly because the costs of arbitration exceed the costs of litigation.
10. The growth in international trade has come from an increase in the international
sale of services as well as goods.

4. CHAPTER 15
Legal and Ethics
103. When it comes to product liability, supply management:
a. lowers risk by ensuring that suppliers deliver defect-free goods.
b. has little or no role since this is essentially a legal action.
c. has responsibility only to the internal customer, not the final customer.
d. is liable depending on the type of warranty agreed to in the contract.
e. is responsible for establishing the cost of the actual damage.
104. The authority that is necessary, usual, and proper to carry through to completion
the express authority conferred, is called:
a. apparent authority.
b. implied authority.
c. express authority.
d. direct authority.
e. performance authority.
105. Which of the following is a factor in determining the validity of a contract?
a. incompetent parties.
b. offer and acceptance.
c. employment in the purchasing department.
d. amount over $500.
e. due process.
106. The Sarbanes-Oxley Act:
a. has no impact on the supply management process.
b. requires the Chief Purchasing Officer to sign off on every contract.
c. requires listing off-balance sheet items such as long-term purchase
agreements.
d. requires supply management to report directly to the Chief Financial Officer.
e. affects internal accounting procedures of privately-held companies.
107. The legal authority of a salesperson normally is:
a. the same as that of a buyer.
b. to make legally-binding contracts for $500 or less.
c. to make legally binding contracts for sales over $5,000.
d. to solicit orders and get ratification and acceptance from his or her employer.
e. based on the length of time the salesperson has been employed.
108. When the goods fit the ordinary purpose for which goods of that description are
used in the trade, there is a(n):

5. a. implied warranty of merchantability.
b. express warranty.
c. warranty of title.
d. implied warranty of fitness for a particular purpose.
e. implicit warranty.
109. Corporate social responsibility:
a. is another name for ethics.
b. is another name for supplier diversity programs.
c. requires sacrificing financial gain for the greater good of the community.
d. refers to individual, not corporate, decisions and actions.
e. extends beyond ethics to include community, environment, and human rights.
110. Commercial bribery:
a. usually involves only one company offering bribes.
b. may become an industry practice.
c. is outlawed in very few countries.
d. is outlawed throughout the West, but not in Asia.
e. legal rulings rest on the doctrine of promissory estoppel.
111. In a contractual dispute between buyer and seller, the process of elevating the
discussion from buyer and sales representative up through the organization and out to
an unbiased referee is called:
a. arbitration.
b. mediation.
c. internal escalation.
d. negotiation.
e. adjudication.
112. If a termination for convenience clause is included in a services contract:
a. its validity depends on whether the contract is in the private or public sector.
b. it is easy to determine if it is exercised in bad faith or an abuse of discretion.
c. if exercised in bad faith, it may mean the termination is a breach of contract.
d. specifically identifies events that will trigger termination.
e. it defines what constitutes sufficient cause to terminate.
True and False
1. In many organizations, standards of conduct for purchasing personnel stress the
need to avoid all appearances of impropriety.
2. Normally, if an offer to buy or sell is made, the contract is completed once the legal
documents are in the hands of both parties.

6. 3. If a supplier fails to deliver goods which meet the contract agreement, one of the
buyer's options is to reject the whole shipment.
4. Reciprocity, the practice of requiring a supplier to purchase a set amount from the
buying firm, is legal domestically, but not internationally.
5. The Uniform Commercial Code (UCC) covers the purchase of goods and services,
if the goods portion of the contract is more than 50 percent of the contract value.
6. Mediation and arbitration are examples of alternative legal means of settling
disputes.
7. When an employee who is not a legal agent of the company agrees to buy
something from a salesperson and the item is received and the company pays the
invoice, the employee is exercising implied authority.
8. Payment made to a supplier does not automatically constitute an acceptance of the
goods.
9. In the U. S., product liability is generally considered a strict liability offense which
means that the defendant is liable when it is shown that the product was defective.
10. Under the Uniform Commercial Code, when the buyer has examined the goods as
fully as he or she has desired, there is a warranty with regard to defects which an
examination ought to have revealed to him or her.