INTR SUPPLY CHAIN: Chapter 10

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Globalization

The increasing interdependence of world economies, cultures, and populations driven by cross-border trade and technology.

Offshore Factory

A facility set up in a country with low labor or material costs for eventual import back to the home country.

Source Factory

A factory that manufactures products at low cost but utilizes skilled workers and significant managerial resources.

Server Factory

A facility set up to take advantage of government incentives and meet regional or local market needs.

Contributor Factory

A server factory that also includes product development, production planning, and supplier development.

Outpost Factory

A factory set up in an area with an abundance of advanced suppliers, competitors, and research facilities.

Lead Factory

A source of product and process innovation that provides a competitive advantage across the entire organization.

Reciprocal Tariff

A tax or trade restriction imposed by one country on another in response to similar actions taken by that country.

Ad Valorem Tariff

An import tax calculated as a fixed percentage of the imported good's total value.

Specific Tariff

A fixed monetary tax amount per unit of an imported good regardless of its value.

Compound Tariff

A trade tax that combines both ad valorem (percentage) and specific (fixed) tariff rates.

Mixed Tariff

A tax expressed as either a specific or an ad valorem rate, often used as a transition phase.

Right-to-Work Laws

State laws protecting the right of employees to decide whether or not to join or support a union.

Business Clusters

Geographic concentrations of interconnected companies and institutions that foster innovation and competition.

World Trade Organization (WTO)

An international organization that administers global trade rules and ensures trade flows freely and predictably.

Weighted-Factor Rating Model

A technique comparing potential locations by assigning weights and scores to quantitative and qualitative dimensions.

Break Even Model

A location analysis technique used to find the most cost-effective site based on fixed and variable costs.

International Trade

The exchange of capital, goods, and services across international borders or territories.

Import

A good or service brought into the domestic country from a foreign source.

Export

A good or service produced domestically and sold to a foreign country.

Transaction Costs

Expenses associated with gathering information, negotiating contracts, and currency exchange in trade.

Time Costs

The financial impact of time delays, such as customs inspections, between order placement and receipt.

U.S. Customs and Border Protection (CBP)

The "gateway agency" that controls the import process and protects U.S. borders.

Foreign Trade Zone (FTZ)

Physical areas inside the U.S. considered outside U.S. territory for customs and duty purposes.

Customs Broker

A private specialist that helps move global shipments through customs and handles necessary documentation.