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Purchasing and Supply Chain Manage...

6th Edition
Robert M. Monczka + 3 others
Publisher: Cengage Learning
ISBN: 9781285869681

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BuyFindarrow_forward

Purchasing and Supply Chain Manage...

6th Edition
Robert M. Monczka + 3 others
Publisher: Cengage Learning
ISBN: 9781285869681
Chapter 10, Problem 14DQ
Textbook Problem
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Discuss how foreign trade zones (FTZ) can improve on the advantages gained from worldwide sourcing. Next find the FTZ closest to you.

Summary Introduction

To explain: The way foreign trade zones can improve the advantages gained from worldwide sourcing.

Worldwide sourcing:

It is the seeking of goods and services beyond the borders of a region. It the process where organizations look for the most cost-efficient place globally to manufacture their goods. Most organizations choose a global sourcing strategy as the costs are usually lower abroad.

Explanation of Solution

A foreign trade zone (FTZ) is a designated area in a country where the commercial and domestic merchandise is treated in a fair manner in terms of its customs duty. A foreign trade zone can improve the advantage of global sourcing as shown below:

  • They are useful in deferring, reducing and sometimes eliminating certain duties.
  • It allows entities to get relief from inverted tariffs...

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