International Business: Competing in the Global Marketplace
12th Edition
ISBN: 9781259929441
Author: Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher: McGraw-Hill Education
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Chapter 17, Problem 3CTD
Summary Introduction
To explain: The pros and cons of manufacturing in-house or by an independent supplier and the choice to select.
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A firm must decide whether to make a component part in-house or to contract it out to an independent supplier. Manufacturing the part requires a nonrecoverable investment in specialized assets. The most efficient suppliers are located in countries with currencies that many foreign exchange analysts expect to appreciate substantially over the next decade. What are the pros and cons of (a) manufacturing the component in-house and (b) outsourcing manufacturing to an independent supplier? Which option would you recommend? Why
Procurement-
1)The summary reason for using a global supplier is that better value is perceived to be available from them vs from a domestic source.Â
 True
 False
2)A global supply management arrangement where you put an office in a country where you buy but don't otherwise have a presence is called a _____________?
International trade may offer lower unit prices but at a higher risk. Consider the total cost and trade off lower production costs with higher priced transportation and more uncertain delivery schedules. Add in disruptive weather patterns, multi-language requirements, and fluctuating exchange rates; not to mention political turmoil, labor disputes, and unique tariffs and duties.
throughout the world there is one source for Schachtel Schmuggel Bannware:
CousinsAg, a domestic supplier located in Wahoo, Nebraska
Throughout this turnaround, we will ship utilizing Twenty-foot Equivalent Units (TEUs) from each location. Assume the following:
Projected Annual Demand is 21,500 units
There are 365 days in a year
All product will be shipped to a distribution center in Alliance Fort Worth (AFW) where we will service our customer's needs
Inventory carrying cost is 32.2%
A TEU container can hold up to 600 units of our product.
The Harris EOQ formula is Q* = SQRT((2*Annual Demand*Ordering…
Chapter 17 Solutions
International Business: Competing in the Global Marketplace
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Similar questions
- Is outsourcing still a viable strategy? If many companies are engaging in "reshoring" then what are the advantages of "Free Trade Agreements" such as the USMCA?arrow_forwardIs the following statement correct?   The bargaining power of suppliers in the automotive industry is weak because most of them are small players. Only a few of them are significant in size and the threat of forward integration is low. Suppliers have to play according to the rules set by the car brands. The vehicle brands like BMW, Ford, Toyota, and VW, influence the availability of raw materials and often switch from one supplier to another.   Bitte wählen Sie eine Antwort: Wahr Falscharrow_forward1) A company must choose whether to manufacture a component product in-house or to outsource the work to a third party. Making the component would necessitate spending money that would never be recouped on expensive machinery. Many currency experts predict that the most effective suppliers will be based in nations whose currencies will rise significantly over the next decade. Is it better to (a) make the part in-house or (b) have it made by a third-party provider, and why? In your opinion, which one should you go with? Why?arrow_forward
- Transportation has sometimes been described as the glue that holds global supply chains together. What is the meaning of this statement and do you agree? Why or why not?arrow_forwardWhat are the six standard export documents? For each standard export document, who prepares it, who receives it, and what purpose does it serve? What common information do many standard export documents share? Besides the six standard export documents, identify five other export documents. Under what circumstances might these other export documents be required? For each other export document, who prepares it and what purpose does it serve?arrow_forwardwhat are the advantages of establishing an international purchasing office? what services would such an office provide?arrow_forward
- Recently the minister of finance recommended that companies which use a lot of foreignexchange enter into forward contracts. Define what these are and why they would be helpful?arrow_forwardAs a supply chain consultant what advice would you offer to both Nokia and Ericsson in handling the Risk Management Process in avoiding the extreme impact that these two companies experienced in the advent of this accident; articulating clearly what can be done in managing different Risks in International / Global Supply Chains.arrow_forwardExplain and Describe what is the risk in international sourcing with the help of examples ?arrow_forward
- Describe what is the risk in international sourcing with the help of examples ?arrow_forwardExplain are the advantages of establishing an international purchasing office? provide and explain at least 3 advantages. Explain at least 4 of the services these offices provide.arrow_forwardWhat is one of purposes of understanding the international product lifecycle?​ Group of answer choices Describes central bank intervention in the foreign exchange market Describes the process of by which exchange rates move Helps to explain why people migrate to the U.S. Helps to explain why production is outsourced from inventing countriesarrow_forward
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