GSCM 211 Midterm

comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

PEST analysis can help

avoid problematic practices, implement good practices, spot opportunities

Greenfield Development

A new physical location that is built from the ground up

Communication is important or non important when choosing a supplier

important

Kaizen requires a ________ system

Lean

Instrument used in supplier selection

decision tree

when implemented well, will minimize the ordering cost aspect of the total cost of ownership

communication

the goal of the condone model is to

build cumulative and lasting manufacturing capability

does the trade-off theory apply in all cases?

No

Global Manufacturing competitive index using these factors

talent, productivity, tech, education

Is it rare to fine a single manufacturer who can deliver on cost and dependability

no

According to Milton Friedman, what will result in prosperity for America?

Open our boundaries

Globalization typically refers to the

make or buy decision outside national borders

International Trade Theory

David Ricardo

The Bretton Woods System is the foundation of

Word Trade since 1944

Titans of Industry

Positive name for wealthy business owners of this time. Says that they helped the country become strong.

European Union

An international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members.

African Continental Free Trade Agreement

A trade agreement which is in force between 27 African Union member states

Mercosur

Pact among Argentina, Brazil, Paraguay, and Uruguay to establish a free trade area

USMCA

United States-Mexico-Canada Agreement

Today's retreat from Globalization

Protectionism

Global Trade Benefits

Increased economic growth and job creation, as nations exchange goods, services, and investment.

Improved standard of living, as people have access to a wider variety of goods and services at lower prices.

Reduction in poverty, as seen in the decrease in the number of people living in extreme poverty from 1.85 Billion in 1990 to 767 Million in 2013.

Exchange of technology and knowledge between countries, leading to increased innovation and productivity.

Increased competitiveness, as countries can specialize in what they are best at producing and trade with other nations.

RECP

Regional Comprehensive Economic Partnership

Globalization

interconnectedness and interdependence of peoples and countries. It is generally understood to include two inter-related elements: the opening of international borders to increasingly fast flows of goods, services, finance, people, and ideas; and the changes in institutions and policies at national and international levels that facilitate or promote such flows.

Globalization increases ____________ between countries

interactions

Globalization encourages innovation is a pro or con

pro of globalization

Income of low cost labor in developing countries has increased is a pro or con

pro of globalization

Developing countries have increased access to first-world products is a pro or con

pro of globalization

unequal opportunities across the world is a pro or con

con of globalization

The world's wealth is increasingly concentrated is a pro or con

con of globalization (rich get richer)

Globalization strategy is poorly managed (damage of the environment) is a pro or con

con of globalization

The Wealth of Nations

was written by Adam Smith

Absolute advantage

a party can produce a good or service more efficiently than its competitors

comparative advantage

producing goods and services at a lower opportunity cost

Foundation of the majority of world trade

Bretton Woods System

encourages growth within the country

protectionism

Ferdows and De Meyers - Sand Cone Model

quality, dependability, speed, cost efficiency

Increased awareness of other cultures and countries is a pro or con of globalization?

Pro of globalization

Globalization

an extension of the make or buy decision beyond national borders. Exchange of information, ideas, good, etc. Increased interactions

Pros of Globalization

•Increased awareness of other cultures and countries

•Globalization encourages innovation

•Income of low cost labor in developing countries has increased

•Developing countries have increased access to first-world products

Cons of Globalization

•Unequal opportunities across the world

•The world's wealth is increasingly concentrated (rich getting richer)

•Globalization strategy is poorly managed (damage of the environment)

Adam Smith

Wrote the Wealth of The Nations

-absolute advantage

Mercantilism

countries controlling trade so they export more than they import

Thomas Friedman

"the world has moved from periods of being round (where trade barriers are high) to periods of being flat (where barriers to trade are lowered)

Bretton Woods System

foundation of the majority of world trade

-financial and commodity interdependence

-US dollar as the main trading currency

-Tarriffs reduced or eliminated

Protectionism

Taxing imports to protect a country's domestic industries from international competition, encourage growth within country, sometimes protectionism fails, ex:Harley Davidson

International Entrance

- physical facilities

- service operations

- ownership questions associated with operating internationally

PEST Analysis

Scanning of outside influences on an organization, Political, economic, socio-cultural, technological

Political Considerations

Laws, Property Rights, Political Stability

Economic Considerations

Market and trade cycle, currency fluctuations, economic growth

Socio-Cultural Considerations

Human rights, Culture, language

Technological Considerations

information system, technology platforms, consumer access to technology

Offshoring

Moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available.

Insourcing

moving processes handled by third-party firms in house

Offshore Outsourcing:

Hiring external organization to perform business in a country other than the one where the product / services are performed, developed, or manufactured

Farmshoring

Outsourcing to USA rural-located companies

Homesourcing

Moving service industry employment from offices to home-based

Technology Clusters

Regions of interconnected buyers, suppliers, and producers of complementary solutions (Silicon Valley)

Kaizen

• Japanese word meaning continuous improvement.

• The system that Toyota uses to make products faster, cheaper and better

• Requires continuous improvement, a lean system and close physical suppliers

Global Manufacturing

Tradeoffs vs. Ferrous and DeMeyers

Global Manufacturing tradeoffs

Cost, speed, dependability, quality

Ferrous and DeMeyers

Sandcone model, Build quality, dependability, speed, and cost, required long-term approach