Introduction to International Trade and Logistics

Flashcards covering key concepts from international trade, logistics management, theories, and their associated risks and strategies.

Imports

Goods and services that a country buys from another country.

Exports

Goods and services that are sold to other countries.

International Trade

The buying (importing) or selling (exporting) of goods and services on a global basis.

Advantage of International Trade

Includes increased sales and profit, enhanced domestic competitiveness, global market share gain, selling excess production capacity, and reduced dependence on existing markets.

Disadvantages of International Trade

Includes long-term gains, hiring staff, delayed payments, product modification, and additional financing applications.

Economic Risks in International Trade

Include exchange risk, non-acceptance risk, and buyer insolvency risk.

Political Risks in International Trade

Include war risk and the cancellation or non-renewal of import/export licenses.

Specialization

When a nation produces what it is best suited to do based on geographical factors, climate, resources, and skills.

Absolute Advantage

The ability of a party to produce more of a good or service than competitors, using the same resources.

Comparative Advantage

A model describing how different countries have advantages in producing certain goods based on their resources.

Balance of Payments (BoP)

A statement of accounts of all economic transactions a country engages in with the rest of the world.

Terms of Trade

Measures a country's export prices relative to its import prices.

Trade Openness

The measure of total trade (exports + imports) as a percentage of GDP.

Monetary Policy

Economic policy adopted by a country's central bank.

Fiscal Policy

Economic policy adopted by a country's government.

Logistics Management

The planning and control of the efficient flow and storage of goods and services from origin to consumption.

Supply Chain Management

Processes linked together to convert a basic commodity into a finished product for end-customers.

Inbound Logistics

Transport, storage, and delivery of goods coming into a business.

Outbound Logistics

Flow of finished products from warehouses to customers.

Reverse Logistics

The process of efficiently managing the flow of materials from the point of consumption back to the point of origin.

Bull Whip Effect

Fluctuations in inventory and back-order levels across the supply chain that worsen as one moves upstream.

Economic Trade-off in Logistics

Balancing responsiveness to local markets versus achieving economies of scale.

International Corporate-level Strategy

Strategies that define how a company will manage its operations across multiple countries.

Green Logistics

Minimizing the ecological impact of logistics activities.

Product Take Back

Firms recapturing value by taking back products, often due to bans, and benefiting from reused products.